Risk Handling Methods

Question 1

What is the following Risk Handling Methods?

Answer 1

AVOID, PREVENT, CONTROL, RETAIN, TRANSFER

Question 2

Define AVOID

Answer 2

Example: Under the manufacturing industry, it is to avoid the risk of being sued for loss or injury from a defective product.

Question 3

Define PREVENT

Answer 3

Risks can be prevented with the implementation of prudent risk management practices to avert possible losses.

Question 4

Define CONTROL

Answer 4

Include the use of adequate disaster recovery and business continuity plans.
Example: the use of fire-resistant materials like automated water sprinkler systems.

Question 5

Define RETAIN

Answer 5

Minor losses can be retained or self-borne within the financial capacity of the person.

Question 6

Define TRANSFER

Answer 6

Applying for an insurance premium that transfers all possible risks on the insurer to the company. Known as a risk transfer mechanism.