As director of corporate risk management at one of the world's largest manufacturers of health care products and pharmaceuticals, Scott P. Borup has a diverse set of responsibilities.

Depending on the day, he might be settling a European property damage claim, evaluating a potential acquisition in China or recommending catastrophe mitigation measures for a Latin American factory.

That broad range of tasks reflects a wide variety of risks he deals with at Johnson & Johnson, a Fortune 50 company with 250 operating units and 115,000 employees at more than 1,000 locations in 57 countries.

Known best for its consumer products, such as baby oil and shampoo, Johnson & Johnson also is one of the world's largest manufacturers of pharmaceuticals and medical devices.

Johnson & Johnson's exposures include $60 billion in insured property values and potential mass tort litigation stemming from its pharmaceuticals and medical devices.

His success in managing Johnson & Johnson's risk portfolio has earned Mr. Borup a place on Business Insurance's Risk Management Honor Roll for 2010.

In addition to addressing ongoing exposures, such as supply chain risks faced by a company that uses thousands of ingredients in its products, Mr. Borup's risk management staff of seven regularly tackles emerging risks.

In 2008, for instance, thieves hijacked several Johnson & Johnson trucks, each holding millions of dollars worth of pharmaceutical products. Mr. Borup convened a company task force that implemented stringent security measures to mitigate the theft risk and new accounting practices that improved insurance purchasing for the exposure.

Mr. Borup's other responsibilities include serving on a corporate mergers and acquisition team that has evaluated 75 potential deals and closed more than 30 in the past five years, including purchases in China, Israel and the United Kingdom.

Mr. Borup thrives on the diversity of his responsibilities.

“It might sound corny, but I really think I have the best job in risk management,” Mr. Borup said.

In managing Johnson & Johnson's risks, his staff and business partners say Mr. Borup takes a fair-but-firm approach with insurers and other service providers, which has helped maintain some long-term business relationships for Johnson & Johnson.

Risk management staff member Wayne Klokis, manager of corporate risk management at Johnson & Johnson, describes Mr. Borup as “very intuitive.” He is a “straight shooter” and easygoing yet intense when carrying out his risk management responsibilities.

In addition to running Johnson & Johnson's risk management department, Mr. Borup's serves on the ACE USA client advisory board and is a member of Johnston, R.I.-based Factory Mutual Insurance Co.'s risk management council.

He also is responsible for self-insuring Johnson & Johnson's product liability exposures, for which it is virtually impossible to obtain the desired limits in the insurance market for large pharmaceutical and medical device companies.

To finance its product liability risks, Johnson & Johnson relies on its Vermont-based captive, Middlesex Assurance Co. Ltd. The captive's assets exceed $1 billion, making it “a huge insurance company on its own,” said Mr. Borup, who is the captive's treasurer.

In addition to providing product liability insurance, the captive reinsures fronting policies provided by insurers around the world. It also allows Johnson & Johnson direct access to property reinsurance capacity.

Factory Mutual, which does business as FM Global, is Johnson & Johnson's lead property insurer. As testimony to Johnson & Johnson maintaining long-term insurer partnerships, the company has contracted with FM Global for more than 100 years without contract interruptions, Mr. Borup said.

Long-term relationships result in optimal pricing, terms and resolution of claims, he said.

“We don't want to have spikes and pitches in pricing, but a stable predictable cost of risk; and the partnership approach has proven helpful when we have our problems,” Mr. Borup added.

Over the past five years, Johnson & Johnson has recovered more than $500 million from insurers for product liability, property, employment practices, auto liability and inland transit claims, Mr. Borup said. Yet the company still has good relations with its insurers and has avoided substantial premium increases.

While he credits the long-term relationships and his staff's technical expertise for helping resolve claims amicably, there have been settlement negotiations that required some “table-pounding,” Mr. Borup said.

That is to be expected, he said, when claims grow large and complicated, as happened with a $61 million property insurance settlement following a 2005 boiler explosion at a biotechnology production plant in the Netherlands. Issues that required difficult negotiations included amounts spent on improvements when rebuilding the facility and extra amounts spent to avoid a loss of sales, such as employee overtime expenditures.

On contentious claims, Mr. Borup sees both sides of an issue and works to reach a fair settlement with insurers, said Michael T. Newman, manager of property loss prevention and claims for Johnson & Johnson.

“That is how Scott approaches it: "We are not going to get everything, but we are not going to give up everything either,'” Mr. Newman said of Mr. Borup's approach.

Johnson & Johnson's annual total cost of risk exceeds $300 million, including premium expenses and brokerage fees. About $55 million of that is spent on risk transfer with property and directors and officers liability insurance accounting for the majority of premiums, Mr. Borup said.

The remainder of the $300 million cost of risk is spent on other services such as broker fees, third-party administrator fees and engineering services, among others.

Credit for managing a program that size isn't his alone, Mr. Borup said.

“Any recognition I am getting is directly the result of people working on my staff and people outside of Johnson & Johnson, my external business partners,” he said.

Business partners serving Johnson & Johnson's risk management department receive concise communications of what is expected of them coupled with financial incentives to meet those expectations, said Erin M. Sheridan, a Johnson & Johnson manager of corporate risk management.

“We have a very pay-for-performance mentality around here,” Ms. Sheridan said.

Insurers, brokers and Johnson & Johnson's TPA, Atlanta-based Broadspire Services Inc., must meet specific metrics in contracts that are tied to a percentage of their fees.

Johnson & Johnson pioneered risk management vendor pay-for-performance measurements during the early 1990s and has continued improving them, said Neal Nolan, a Broadspire regional vp of client services who uses Johnson & Johnson's model in presentations to other clients considering applying vendor performance incentives.

Insurance renewals for Johnson & Johnson are never a matter of maintaining the status quo, but an opportunity for Mr. Borup to raise the bar on the level of performance demanded from his providers, said Ronald Reinartz, managing director for brokerage Marsh Inc. in New York and the client executive for the Johnson & Johnson account.

“There is not any level of complacency that would be tolerated,” Mr. Reinartz said.

“Scott is a tough guy to work for...he is a good taskmaster and very fair as well,” Mr. Reinartz said.