Beating the House – Betting on Yourself

Winning is one of the best feelings in the world.  Whether it’s a sports bet, at the casino, or beating your competition, it always puts a smile on my face.  Because I love to win, I avoid the casinos.  They can smell my money like a shark smells blood.  During my first trip to a casino, I got cleaned out playing blackjack after only making it through five hands.  Being broke, I decided to go watch a friend who was playing slot machines.  He had finally broken even, and I tried my best to convince him to quit while he was ahead.  It’s a good thing he didn’t listen because he walked away with about $700 that night.  True story.  That was my first and last time at a casino.  For the fishermen out there, I am a human cold front.

The reason I don’t like the casinos is not because I’m a terrible gambler (I am).  It has more to do with the fact that there aren’t a whole lot of things I can do to increase my chances of winning.  It’s like betting on the Broncos to cover a 2.5 point spread in the Super Bowl – you have no way to affect the outcome of the game.  You can’t get out there and play the shutdown corner on Doug Baldwin (not that it would help in your case) to help keep Seattle out of the end zone.  You’re completely relying on someone or something that you have absolutely no control over. 

Here comes a much safer bet – you, your business, your drive and passion to succeed in whatever you are doing.  It’s a great way to gain an edge on your competition.  Congratulations!  Either by choice or by necessity, you’re one of about 10% of Americans who had the audacity to start their own business.  Venturing out on your own was a gamble in its own right, but a calculated risk for sure considering you can affect the outcome. 

You cannot control all the factors that will affect the success of your business.  What you can control is your greatest asset – you.  Your hard work, skill, dedication and drive all are going to play an integral part of your business’s success.  As such, you have probably planned or have strategic actions you are taking each day to help improve your odds.

Gambling has a place in risk management as well.  There is such a thing as “over-insurance”.  I’d describe it as buying coverage for anything and everything you can think of while at the same time assuming very little risk.  While your agent or broker would probably love you for purchasing all of this insurance, there are plenty of risks you would be better off retaining yourself. 

By assuming some of the risk, several things are likely to happen: 1) You’ll be more proactive in risk management.  Either through preventative maintenance, training, or strategic planning, your additional buy-in will help decrease the chance of certain losses from occurring.  2) Your insurance carrier’s underwriter is going to appreciate this.  Knowing you’ve assumed more of the risk, he or she is likely to cut you some slack on the premium.  3) You’ll find these actions will cross into other areas, i.e. you’ve taken steps to prevent auto accidents by implementing driver training, and at the same time you are reducing workers compensation claims because the employees won’t be getting injured in these accidents.  4) By assuming more risks, the insurance company is paying less towards claims, and as a result you are more likely to see your premiums decrease.

Insurance at its core is meant for catastrophic risks.  If the risk is something that would put you out of business or create a severe setback, it’s probably one that you should buy coverage for.  These will be different for every business, so it’s important to know where you stand and what you can afford to do.  Remember that by just taking on a little risk yourself, you can realize some significant cost savings that you can reinvest in other areas of your business. 

Betting on yourself can be a great way to save money and help you gain an edge on your competition.

Andy Bertram CPCU, ARM-E
Risk Advisor
620 Main St
Red Wing, MN 55066
Phone: 651-800-6173
Fax: 651-388-8443

www.cobrown.com