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Hrm 531 Week 3 Risk Management

Decent Essays

Risk Management
Insurance needs. Most livestock hauling companies offer no employee benefits as all drivers are contract labor. Helm Livestock does have trucking, collision, and liability insurance for the company, purchased through Owner Operator Independent Drivers Association (OOIDA). This is an estimated monthly cost of $1,100. OOIDA also provides assistance with setting up the Limited Liability Company, and legal assistance, which is included in the monthly charge.
In the event of an emergency, such as illness or a vehicle accident, there are contingency plans in place. If there is an unplanned illness, there will be a decrease in the income due to missed work. However, the escrow account will be used to ensure all payments are paid since there will be no income coming in. If the driver is involved in an accident and the semi-truck is totaled, the insurance company provides payment for a rental truck. The insurance also will pay for a new truck, based on the …show more content…

Money will be saved throughout the life of the business to help keep the company going. This fund is also to be used if a truck or trailer requires expensive maintenance that is not already budgeted for. The escrow fund will ensure that cash flow is still available for the business and hardship can be avoided. The projected income also includes only 48 weeks of work, leaving approximately four (4) weeks a year for downtime such as vacation, time for repairs, etc.
The worst-case scenario would be that the livestock hauling business decreases rapidly and work cannot be found, requiring equipment to be sold to keep supporting the business. There is the potential, since most companies own the semi-truck and trailer, to branch into other industries in a financially difficult time. Being able to haul freight or look into hauling heavy equipment until the livestock market will be

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