Risk Management

Risks are events or circumstances which could have a negative effect on your business.

The negative effect could include an employee getting injured, the business losing money or your reputation being damaged. Risk increases when an event isn’t planned for or happens differently from what you expected, such as a downturn in the market or a flood ruining your stock.

Risk management simply means to identify, assess and manage risks.  By collecting information about potential risks you can make informed decisions. By making risk management an active strategy in your business, and dealing with risks before and as they occur, you can minimise losses.

Common hazards and risks

Food industry practices and processes include many common risks, such as:

  • manual handling
  • colliding with mobile machinery, animals or boxes
  • cuts from knives
  • muscular stress caused by lifting, pushing and pulling
  • muscular stress through repetitive work
  • slips, trips and falls
  • fire and emergency
  • drugs and alcohol in the workplace
  • violence in the workplace
  • hazardous substances
  • injury reporting and management
  • workplace noise

It is sensible to plan to avoid putting anyone at unnecessary risks as far as possible. Techniques to achieve this include:

  • documenting business processes
  • including adherence to safety procedures and use of safety equipment as part of each staff member’s job description and performance review process
  • inducting new staff, and training staff in new processes and the safe use of equipment
  • regular refresher training and test drills
  • maintaining high safety standards and very strict food safety standards
  • ensuring equipment is well guarded to avoid personal injury, with Standard Operating Procedures in place and clearly visible
  • maintaining equipment, servicing regularly, and promptly repairing any damage or defect
  • maintaining a neat and orderly work environment
  • fitting out the work environment with safety equipment such as fire extinguishers and blankets, eye rinses and first aid kits
  • ensuring at least one staff member is trained to administer first aid
  • maintaining good stock control
  • banking cash regularly
  • securing premises adequately
  • backing up computer systems regularly and preferably storing backups offsite


Risk is intrinsic to living, and certainly part of doing business. Your approach to risk depends on your risk profile – that is, how much risk you are prepared to take without protection against a negative impact on you and your business.

Whatever your risk profile, it is sensible to minimise avoidable risks. Insurance is an obvious mechanism for containing business risk. Some insurance policies are required by legislation for you to operate a food business. These include covering your risk with regard to food safety, occupational health, welfare and safety (OHS&W),and public liability workers compensation. You may also wish to consider insuring against business interruptions, such as through damage to your premises or systems resulting in you being unable to manufacture product to supply your customers, and you should consider whether product recall insurance is relevant to your business as well.

Your accountant and insurance broker can help you decide how much cover and what type of cover you need.

Disaster recovery planning

Even comprehensive insurance may not compensate your business for the full cost of a major incident.

If your workshop or retail premises burns down, you may be able to clear the debris and rebuild if you are insured. You may even be covered for loss of profits. But the missed opportunities for growth, the disruption to your life and your business plans, the extra paperwork – insurance will not cover these costs, which may be even more significant.

Similarly, product liability insurance may cover you for a food quality breakdown, but the loss of reputation may destroy your product and your brand and put you out of business. And if you, as a principal or owner of the business, can’t be at work, there is a real risk that even the best-intentioned and supportive staff team can’t keep the show on the road.

Disaster recovery planning is the process of looking at major disasters that could affect your business such as fire, flood, illness, sabotage or product failure, identifying the risk and potential cost and developing a plan of action to deal with it. Can you, for example, shift your operation to other premises in the event of a flood or fire? Do you know how long it will take to restore your computer systems if they fail? What will you do if all your customer records are lost?

Your disaster recovery plan may be brief, identifying the risk and how you will respond to it, who does what and who needs to be advised should this event occur. There are templates available on various websites to get you started, look for one that’s suitable to the nature of your business. Involve your financial and legal advisors, accountant and staff in the development of this plan and make sure you revisit it at least annually to ensure it is up to date and ready for action.

Who can help?

Health SA – Food Safety

Visit this site for a comprehensive list of issues to consider in developing your risk management strategy.

Reduce your risk
Organisations in South Australia have a responsibility to provide a healthy, safe and risk-free environment for their staff, members, volunteers and the communities they serve.

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