Assignment 2: Risk Control Flashcards
Risk Control
A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable
Avoidance
A risk control technique that involves ceasing or never undertaking an activity so that the possibility of a future loss occurring from that activity is eliminated
Reduces loss frequency
Loss Prevention
A risk control technique that reduces the frequency of a particular loss
Reduces loss frequency
Loss Reduction
A risk control technique that reduces the severity of a particular loss
Reduces loss severity
Disaster Recovery Plan
A plan for backup procedures, emergency response, and post-disaster recovery to ensure that critical resources are available to facilitate the continuity of operations in an emergency situation
Separation
A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss
Reduces loss severity and makes losses more predictable
Duplication
A risk control technique that uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve
Reduces loss severity and makes losses more predictable
Diversification
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions
Reduces loss severity and makes losses more predictable
Risk Control Goals
- Implement Effective and Efficient Risk Control Measures
- Comply With Legal Requirements
- Promote Life Safety
- Ensure Business Continuity
Life Safety
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
COPE Factors
These factors are often used to assess fire loss exposures
C: Construction – loss prevention and loss reduction through construction designed to minimize frequency and severity of losses
O: Occupancy – loss reduction through safety training and emergency evacuation procedures
P: Protection – two loss reduction measures used for internal fire protection are fire detection and suppression. External protection could involve selecting a building site near a highly rated fire department
E: External Exposure – the loss prevention and reduction measures may include relocation away from external hazards or removing combustible materials from the space separating the protected building from a neighboring building
Property Loss Exposures (Risk Control Techniques)
The risk control techniques commonly selected for property loss exposures vary by the type of property and the cause of loss threatening the property. Avoidance, loss prevention, loss reduction, separation, and duplication can all be applied in some way
Liability Loss Exposures (Risk Control Techniques)
Three risk control techniques can be used to control liability losses: (1) avoid the activity that creates the liability loss exposure, (2) decrease the likelihood of the losses occurring (loss prevention), and (3) if a loss does occur, minimize its effect on the organization (loss reduction)
Personnel Loss Exposures (Risk Control Techniques)
The two main techniques are loss prevention (used to control work-related injury or illnesses) and loss reduction (using emergency response training and rehabilitation management)
Net Income Loss Exposures (Risk Control Techniques)
Any risk control measures that control property, liability, or personnel loss exposures also indirectly control net income loss exposures
Separation and duplication are both directly aimed at reducing the severity of net income losses and diversification can also be a viable option
