Sickness or disability (Resulting in loss of income and earning power, involving additional expenses and extra needs)
Unemployment (Loss of income may be temporary/permanent, but routine living expenses continue. Fixed liabilities like loan repayments have still to be paid , hence further multiplying the difficulties )
Additional expenses occasioned by the loss of property
They arise out of human mistakes often termed as civil wrongs committed by a person resulting in injury and/or death to another person, and/or loss of or damage to property.
Risk arising from failure on part of others
Risk arising due to failure on part of another person to meet a specified obligation, e.g. guarantee bonds and sureties.
Fidelity Risks : Risks arising due to dishonesty of employees and others in course of performance of their duties causing loss of money and stocks to the owner . Risks due to ownership and use of Transport vehicle : Use of transport vehicles opens scope for two types of risks – 1 Own damage or loss to the vehicle due to a variety of pure risks including negligence 2 Death/injury to third parties and loss/damage to their property.
Management of Risks Definition Management of risks is concerned with direction of purposeful activities towards the achievement of individual or organizational goals. Risk Management may be defined as “the identification, analysis and economic control of those risks which can threaten, the assets or earning capacity of an enterprise.” Risk management evaluates which risks identified in the risk assessment process require management and selects and implements the plans or actions that are required to ensure that those risks are controlled.
Protecting employees from accidents that might result in death or injury
Due attention given to cost of handling risks.
Effective utilization of resources.
Maintaining good relations with society and public.
Risk Identification The various methods of risk identification are .
Preparing Checklist of risks or various losses which may arise due to risks
On-site Inspections and risk assessment
Financial Statement analysis
Flowchart preparation and identification of risky activities
Interaction with employees for their views about risk exposures of business based on their knowledge and experience
Statistical records of occurrence of losses related to various categories of risks
Scope of Risk Management Control of Loss Financing of Loss Internal Risk Control Extra Precautions Risk Retention and Self Insurance Reduced Level of Risky Activities Non-Insurance Risk Transfers Buy Insurance Policies Contracts Investment In risk information Diversification