Introduction Risk management is a very crucial aspect in all fields of life. It is even more important when it comes to the business world that is faced by a variety of risks (both financial and non financial), which could lead to losses and to the extreme; it may lead to close down of business organizations. Risk management entails the process of carefully identifying, assessing and prioritizing risk in a given setting, industry or business organization (Rowe, Mason, Dickel and Snyder 1989). It also involves the strategic application of the available resources in an effort to reduce, scrutinize, and manage the probability and effects of the risks while at the same time trying to maximize opportunities for better performance of a business (Chapman and Ward 1997). This piece of work will give an in depth discussion of the aspect of risk management in businesses. Much emphasis will be given to the issue of climate change and how it influences the flood risk in Queensland Australia and its effects to businesses affected. The insurance industry will be the main focus. Discussion There are various business risks with each being associated with different effects and hence necessitating different mitigation strategies. Climate change in any given part of the world could be linked to a variety of risk factors depending on the situation and the particular risk involved (NSW Department of Environment and Climate Change October 2007). Floods in Queensland, Australia are a major risk to not only personal lives but also to businesses and hence the need for effective risk management practices (Department of Finance1991). Transport is very much affected by the floods leading to delays, loss and damages of products in transits in a given business. Delays in delivery of the products means delay in production processes and also delay in making deliveries to consumers (Grey 1995). Insurance industry is related to all forms of businesses where various activities and products are insured for instance against risks such as damages, floods, losses or fire. In regard to flood risk in Queensland Australia, the insurance industry has had a rough time in the process of managing the risk for instance in terms of compensations. This is because the risk is so prevalent. All in all, the insurance industry has taken responsibility of providing maps of areas that are at high risk of flood. It also cooperates with the government in mitigating and managing flood (Cooper, Grey, Raymond and Walker 2004). Although it is hard to ascertain the risk caused or associated with floods in Australia, there exist some ways through which it could be estimated, for example through the impacts suffered (Tweeddale 2003). The major problem of the insurance industry however comes in the process of ascertaining the real floods threats for the purpose of compensation. This is because there may be chances of people claiming compensation from insurance companies even when the risk suffered is not associated with floods. According to Anonymous (2011), revenue for different crops such as fruits and vegetables declined following floods in Australia. The insurance industry has been experiencing difficulties in understanding and pricing floods and this has led to obstacle in achieving market available for insurance cover (BTE 2001). According to Australian Bureau of Agricultural and Resource Economics and Sciences (2011), it is evident that the risks linked to floods are very harmful to businesses. For this reason, there is dire need to come up with ways through which the risk ca