04. Important Terms - Risk Management Flashcards
1
Q
Risk Management
A
Having a plan for how to deal with possible future losses.
2
Q
Q: what are the four risk management techniques?
A
- Risk Avoidance
- Risk Reduction
- Risk Transference
- Risk Retention
3
Q
Risk Avoidance
A
Not taking an action if it involves what is deemed too much risk.
4
Q
Risk Reduction
A
Taking measures to reduce the risk involved in an action ( also called mitigation )
5
Q
Risk Transference
A
Management of severe risks by transferring the risk to another party ( i.e. insurance )
6
Q
Risk Retention
A
Acknowledging the risks and preparing to handle unexpected losses that may occur (i.e. not getting insurance, setting money aside to pay for losses when they arise )
7
Q
Risk Management Techniques ( Graph )
A
High Freq. :: Low Freq.
High
Severity :: avoid :: transfer (insurance)
Low
Severity :: reduce :: retention
