Risk management chapter 5
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The objectives or goals of risk control options.(3)
- 1.reduce the frequency of the loss
- 2. Reduce the severity of the loss
- 3. improve the predictability of losses
stop engaging in the activity causing the loss
Never to engage in the activity causing the loss
What are problems with the use of avoidance as a rm strategy?(4)
- 1.usually has an opportunity cost
- 2. avoiding one loss exposure may create another one that didn't previously exist
- 3.Avoidance cannot be used for all loss exposures
- 4. may have a legacy cost associated with it (losses from past activities)
losses from past activities
- attempts to decrease the freq. or prob. of the loss
- does not completely eliminate it
heinrich's domino theory
Interrupt or break the chain of events that take place prior to a loss.
something done before or after a loss to reduce severity
you know who they are
examples of post loss loss reduction activities
rehabilitation programs and product recalls
examples of pre loss loss reduction activities
separation of exposure units vs duplication of exposure units?
duplication holds the units in reserve, while separation can make use of the exposure units.
risk control technique that reduces the frequency of particular loss.
A risk control technique that spreads loss exposures over numerous products, markets or regions.
The portion of fire safety that focuses on the minimum building design , construction, operation, and maintenance requirements necessary to assure occupants of a safe exit from the burning portion of the building.
What is an example of avoidance being a feasible option?
Obgyn not delivering babies
- goal is to reduce frequency or severity of
- losses or make losses more predictable
What would you like to do?
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