Module 1 unit 6: Risk response and risk treatment Flashcards
Define what is meant by risk treatment
A risk response to risks that can be further treated by the introduction of cost-effective corrective controls.
Which one of the following best describes risk analysis prior to any risk treatment?
a residual risk
b target risk
c current risk
d gross risk.
d - gross risk
Which one of the following options from the 4Ts of hazard risk management would not result in a reduction in risk severity?
a terminating the source of the risk
b treating the risk
c transferring the risk
d tolerating the risk.
d - tolerating the risk.
Summarise the differences between risk responses to opportunity risk with that of hazard risk.
Opportunity:
Exploit
Exist
Explore
Exit
Hazard:
Tolerate
Transfer
Treat
Terminate
Explain the nature of preventive, corrective, directive and detective (PCDD) controls.
Preventive: Limit the possibility of an undesirable outcome occurring
Corrective: Limit the scope of loss once a risk has been realised e.g. insurance
Directive: Controls to ensure a particular outcome is achieved e.g. PPE
Detective: Controls designed to identify occasions when undesirable outcomes have been realised e.g. incident reporting
Identify two ways in which monitoring and review can help to improve risk management.
Monitoring and review ensures that the organisation monitors risk performance and learns from experience.
Explain what is meant by a near miss.
A near miss could be described as the realisation of a risk that does not result in significant impact, but could have been worse.
List the three main categories of insurance.
- Mandatory/legal/contractual
e. g. employers liability, public liability, professional indemnity - Balance sheet profit and loss protection
e. g. business premises, business interruption, motor insurance - Employee benefit/protection of employee assets
e. g. Life and health, directors’ and officers’ liability
Identify two advantages and two disadvantages of insurance.
Advantages:
- indemnity against an expected loss
- access to specialist services as part of the premium
Disadvantages:
- Time taken to obtain settlement
- Potential for disputes around level of cover and term of policy
List the key stages of a business continuity plan.
- Identify crucial risk factors already affecting the org
- understand needs and obligations of the org
- establish, implement and maintain business continuity management system
- measure the overall capability to manage disruptive incidents
- guarantee conformity with stated BCP
Which one of the following types of control is a fire insurance policy a good example of?
a preventive
b corrective
c directive
d detective.
b corrective
Which one of the following outcomes does a fire alarm produce as a risk treatment in the case of a fire?
a reduce likelihood but not impact
b reduce impact but not likelihood
c reduce both impact and likelihood
d reduce neither impact nor likelihood.
d reduce neither impact nor likelihood.
Without any further response (normally a corrective control) the alarm will just ring but nothing else will automatically happen to reduce the impact of the fire (for example, the use of an extinguisher or the evacuation of staff, which are corrective controls).
Which one of the following scenarios is an anticipatory response relevant to?
a emerging future situations
b providing clear guidelines for risk treatment
c a type of preventive control
d the activity of learning and improving the risk management process.
a emerging future situations
Which one of the following types of risk is “accept” a suitable response to?
a operational risk
b tactical risk
c business continuity risk
d opportunity risk.
b tactical risk
One of the 4A responses
Which one of the following types of risk can a “fifth T” be used as a response to?
a hazard risk
b operational risk
c business continuity risk
d opportunity risk.
d opportunity risk - “Take”
