Raves & Associates Risk Management

The collapse of Spirit Airlines is a good reminder that many of the biggest business risks never appear on an insurance application.

Airlines live and die by fuel prices. Jet fuel is often one of the largest and most volatile line items on the income statement. That is why many carriers actively hedge using energy futures and options, locking in forward prices to reduce earnings volatility, protect cash flow, and stabilize pricing strategy.

Hedging is not a silver bullet. Capital structure, debt load, competitive pressure, and operational ex*****on ultimately decide whether a company survives. Spirit clearly had broader financial challenges that fuel hedging alone could never solve.

This is the takeaway for business owners:

Your risk profile includes market risk, not just insurable risk.
Commodity inputs. Interest rates. Currency exposure. Supply chain pricing. These can all be modeled, quantified, and hedged.

If your “risk manager” only talks about insurance policies and contract language, you do not have a risk manager. You have an insurance broker.

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Inland Marine coverage can reimburse you for stolen tools. Sometimes this can be added to your General Liability policy for little extra cost. Do you have tool coverage?

Hard hat: optional. Workers’ Comp: mandatory.

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A close call today is a reminder that smart risk management keeps tomorrow’s job moving forward.