Get a read on risk.

Time will tell if the Gulf of Mexico oil spill will kill BP or just severely cripple it, but whatever the case I’ll bet they didn’t see it coming! Will you?

It looks like this spill will be (if it isn’t already) the biggest man-made disaster ever. The extent of the spill, the scope of damage and the resulting impacts on the environment, marine life, economies, and people remains to be seen, but catastrophic sums it up.

BP and all of the other world’s oil companies plan for spills. They build complex risk models, examine alternative worst case scenarios, look at maximum probable losses, and they are generally very good at measuring and managing risk.

But what if the worst case scenario that you imagined turns out to be wrong?

A company’s reputation is its biggest asset! Successful companies have always guarded their reputations at all costs. Corporate communications have always been very structured and deliberate and the messaging meticulously controlled by dedicated professional spokespersons.

That was before blogging, Twitter, Facebook and all the other new social media that gives all of your employees and customers a soapbox and a bullhorn with a global audience!

Aon just released a study that SMBs need to pay attention to. It showed that those organizations that adopted a more advanced focus on risk management saw benefits that include enhanced shareholder value, a reduction in their total cost of risk, strengthened business resiliency and increased operational efficiency.

This week, ClearRisk presents a guest post by Thomas M. Bragg. Tom, who has specialized in business planning, strategy and business risk management for 20 years, writes a blog about practical risk management for small business.

More and more is being written about risk management for small and medium sized businesses (SMBs). In fact, if you do a little bit of research, you’ll probably find yourself soon overwhelmed with advice, methods, terminology and tools.

Robert has been one of your most trusted employees for fifteen years. He is extremely hard working, dedicated to the organization and consistently goes above and beyond to make the company better.

While delegating tasks to your warehouse staff, Robert loses his footing and falls six feet from a platform to the floor below. He is badly hurt, spending months in recovery and is unable to return to work.

What do you tell his family? How do you replace him? What are the costs?