risk audit

The risk audit: 5 steps to make your farm or business safer and more insurable

Whether you run a farm, a trade business or a small retail shop, understanding your risks is the first step to protecting what you’ve built. And while insurance plays a crucial role, it works best when paired with proactive risk management.

That’s where a risk audit comes in. Think of it as a health check for your operation—a practical way to identify potential hazards, prevent incidents, and make your business safer, more resilient and more insurable.

In this article, we’ll walk you through five simple steps to conducting your own risk audit, and how this process can support smarter insurance decisions.

Step 1: Identify the risks

Start by looking at all aspects of your operations—physical, financial, digital, environmental and human.

Typical risks might include:

  • Fire, storm or flood exposure

  • Machinery breakdown

  • Theft or vandalism

  • Workplace injuries

  • Livestock straying or harming others

  • Supply chain delays

  • Cyber threats or system outages

  • Legal or liability exposures

Walk around your property or premises with fresh eyes. Ask: What could go wrong? What would it cost? And what can I do about it?

Tip: Involve your team in this step—staff often spot risks you may not.

Step 2: Assess the likelihood and impact

Once you’ve listed your risks, consider how likely each one is to occur, and what the consequences would be. This helps you prioritise which risks need urgent attention.

For example:

  • A storm might be moderately likely, but high impact

  • A cyber scam may seem less likely, but could be financially devastating

  • A minor injury is quite likely—but usually manageable

Use a simple matrix (low/medium/high likelihood vs. low/medium/high impact) to categorise each risk.

Step 3: Put controls in place

Now it’s time to act. For each key risk, identify ways to reduce the chance of it happening—or lessen the damage if it does.

Some examples:

  • Install smoke detectors and keep fire equipment serviced

  • Secure machinery in locked sheds or fenced areas

  • Keep walkways clear to avoid slips and trips

  • Train staff on safe handling, hygiene and emergency procedures

  • Regularly back up your digital systems

  • Use secure passwords and antivirus software

  • Keep insurance policies up to date with accurate sums insured

Many of these controls are low-cost and high-impact. And importantly, they can make your business more attractive to insurers—potentially lowering your premiums.

Step 4: Review your insurance

Once you’ve completed your risk audit and implemented safety measures, it’s a great time to review your insurance. Are you covered for the risks you can’t control? Have you adjusted your sums insured to reflect current values?

Look at:

  • Property, equipment and stock cover

  • Business interruption insurance

  • Public and product liability

  • Vehicle and machinery insurance

  • Workers’ compensation and management liability

  • Cyber insurance

Talk to your broker about how your risk reduction efforts could impact your cover or premiums.

Step 5: Monitor and revisit regularly

Risk management isn’t a one-off task. Your business evolves, new risks emerge, and systems change. Set a reminder to review your risk profile at least once a year—or after any major change in your operations.

Keep records of your audit, including any incidents, near misses, or improvements made. This can help with future claims, inspections or insurance negotiations.

Better risk management, better outcomes

A well-managed business is not only safer for your staff and customers—it’s also better positioned for long-term success. And when insurers can see that you take risk seriously, they can be more likely to offer broader, more affordable cover.

We’re here to support your success

At Western General, we believe good insurance starts with good advice. We can help you assess your risks, identify gaps in cover, and tailor a protection plan that fits your farm or business—now and into the future. Contact us here.

The information in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. You should consider whether the information is appropriate for you and consult a qualified insurance adviser before making any decisions regarding insurance products.