MODULE 1:
Definition of Risk and uncertainty- Classification of Risk, Sources of Risk-external and internal. Risk Management-nature, risk analysis, planning, control and transfer of risk, Administration of properties of an enterprise, provision of adequate security arrangements. Interface between Risk and Insurance- Risk identification, evaluation and management techniques, Risk avoidance, Retention and transfer, Selecti9on and implementation of Techniques. Various terminology, perils, clauses and risk covers.
MODULE 3:
Credit Risks Credit Risk Management models - Introduction, Motivation, Funtionality of good credit. Risk Management models- Review of Markowitz’s Portfolio selection theory –Credit Risk Pricing Model – Capital and Rgulation. Risk management of Credit Derivatives.
Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters
Risks which are not capable of avoidance, prevention, reduction to a large extent or assumption may be transferred from one party to the other party. The basic objective of insurance is to transfer the risk of a person to the insurance company which has easily spread it over a large number of persons insuring similar risks. As such, for handling risks which involve large financial losses or which are dangerous, insurance is a means of shifting such risks in consideration of a nominal cost called premium.
In this article how risk management in banks is an important concept, what type of risks banks faces and how they curb it through risk management model is described
Hazards Risk and Perils, a complete explanation .Sagar Garg
A complete description of risk hazard and perils with gif pictures.
download it for the best view. as gif images on work when it was run on power point platform
MODULE 3:
Credit Risks Credit Risk Management models - Introduction, Motivation, Funtionality of good credit. Risk Management models- Review of Markowitz’s Portfolio selection theory –Credit Risk Pricing Model – Capital and Rgulation. Risk management of Credit Derivatives.
Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters
Risks which are not capable of avoidance, prevention, reduction to a large extent or assumption may be transferred from one party to the other party. The basic objective of insurance is to transfer the risk of a person to the insurance company which has easily spread it over a large number of persons insuring similar risks. As such, for handling risks which involve large financial losses or which are dangerous, insurance is a means of shifting such risks in consideration of a nominal cost called premium.
In this article how risk management in banks is an important concept, what type of risks banks faces and how they curb it through risk management model is described
Hazards Risk and Perils, a complete explanation .Sagar Garg
A complete description of risk hazard and perils with gif pictures.
download it for the best view. as gif images on work when it was run on power point platform
This presentation provides a comprehensive plan for implementing an enterprise risk management program. It covers the costs/benefits of an ERM program, the critical knowledge, skills and abilities of a Chief Risk Officer, a risk taxonomy for insurance firms, a hypothetical organizational structure for an electric utility, a sample risk register, and other useful information.
CHAPTER 7 Risk Assessment, Security Surveys, and PlanningLEARNIN.docxchristinemaritza
CHAPTER 7 Risk Assessment, Security Surveys, and Planning
LEARNING OBJECTIVES
After completing this chapter, the reader should be able to
· ■ define risk and risk assessment.
· ■ list and describe five distinct types of risk that threaten individuals and organizations.
· ■ discuss management techniques associated with risk elimination, reduction, and mitigation.
· ■ evaluate risks to determine vulnerability, probability, and criticality of loss.
· ■ conduct a risk assessment utilizing subjective as well as objective measurements.
· ■ conduct a security survey.
· ■ analyze needs identified through a risk assessment.
· ■ develop appropriate courses of action to eliminate, reduce, or mitigate risks identified in a risk assessment.
· ■ discuss the importance of the budget process.
· ■ demonstrate knowledge of crime prevention through environmental design.
· ■ demonstrate knowledge of emergency planning.
INTRODUCTION
A major focus for security management is the concept of risk. Subjective information as well as objective measurement instruments (such as a security survey) are used in an essential first step of a planning process designed to identify and assess the threat posed by each risk source. As the planning process proceeds, security personnel make recommendations and determine the financial impact of any potential risk mitigation strategy. Planning activities also involve preparation for emergency situations and consideration of anticrime measures available through environmental manipulation.
THE CONCEPT OF RISK
Risk Defined
Risk may be defined as the possibility of suffering harm or loss, exposure to the probability of loss or damage, an element of uncertainty, or the possibility that results of an action may not be consistent with the planned or expected outcomes. A decision maker evaluates risk conditions to predict or estimate the likelihood of certain outcomes. From a security perspective, risk management is defined as the process involved in the anticipation, recognition, and appraisal of a risk and the initiation of action to eliminate the risk entirely or reduce the threat of harm to an acceptable level. A risk involves a known or foreseeable threat to an organization’s assets: people, property, information, or reputation. Risk cannot be totally eliminated. However, effective loss prevention programs can reduce risk and its impact to the lowest possible level. An effective risk management program can maximize asset protection while minimizing protection costs (Fay, 2000; Fischer & Janoski, 2000; Kovacich & Halibozek, 2003; Robbins & Coulter, 2009; Simonsen, 1998; Sweet, 2006).
Types of Risk
Generally, risk is associated with natural phenomena or threats created by human agents. Natural risks arise from earthquakes, volcanic eruptions, floods, and storms. Risks created by human beings include acts or failures to act that lead to crime, accidents, or environmental disaster. As many as five distinct types of risk threaten individuals a ...
Introduction to Risk ManagementMana.6330OverviewTatianaMajor22
Introduction to Risk Management
Mana.6330
Overview
Risk Management is the continuing process to identify, analyze, evaluate, and treating loss exposures and monitoring risk control and financial resources to mitigate the adverse effects of loss.
Enterprise Risk Management, expands the province of risk management to define risk as anything that can prevent the company from achieving its objectives.
Risk Management OverviewOperationalReputationalBusinessCyber
Corporate Risk can be defined in four categories.
The four basic types of risk management to consider:
Risk Avoidance
Risk Reduction
Risk Transfer
Risk Retention
Risk Items that can produce CRISIS
Economic: Events or situations like strikes, market crashes, and labor shortages.
Informational: Loss of important information (organizational records, public and confidential records), theft through phishing attacks, social engineering, leaking of sensitive data.
Physical: Comprised major equipment, loss of suppliers disruption in key operations.
Human Resources: Loss of key team members, vandalism, and/or workplace violence.
Reputational: Rumors/gossip hurt the reputation of the organization.
Psychopathic: Terrorism, kidnapping, tampering with products.
Natural Disasters: Tornadoes, earthquakes, fire, flash floods, disease outbreaks, etc.
CRISIS is the final step of Risk, taking no action for risk mitigation
The Stages of Crisis Management
Stages of Crisis Management
Pre-Crisis
Crisis Response
Post-Crisis
Prevention and preparation, i.e., reducing the known risks that can lead to crisis.
When management must respond to a crisis.
The post-mortem phase is when companies look for ways to better improve preparations for the next crisis as well as fulfill commitments made during crisis response.
Risk
“…risk has always been with us.”
Thomas Aquinas
Risk: “…the possibility that events will occur and effect the achievement of objectives.”1
This the typical definition which should alert the reader to the fact that both qualitative and quantitative probabilities are required in the recognition of risk.
1 COSO 2017
Risk Fundamentals
Perception of risk is subjective.
Risk approach is driven by a tendency to look backwards.
Observation is the key to “risk”.
“Cause and Effect” which is the most common approach.
Thought must be expanded to “Cause – Event – Effect (or the Consequence)”
Example of Cause and EffectYearCauseEventEffect2001Rise of Islamic fundamentalism; failure of intelligence; inadequate air defense systems; lax of airport securityWorld Trae Centre (9/11) terrorist attack3,000+ deaths in the WTC; second Iraq war; global security crackdown.2010Defective cement on the well; cost-cutting decisions; inadequate safety systems; inadequate industry practices and government policiesBP Deepwater Horizon, Macondo wellTotal discharge at 4.9 million barrels; clean-up costs, charges and penalties more than $65 billion; disaster fo ...
effective risk management systems can best be achieved in an atmosphere of trust.
Successful risk management provides assurance that the organisation’s objectives will be
achieved within an acceptable degree of residual risk.13 It also creates an environment in which
quality improvement occurs as the natural consequence of the identification, assessment and
elimination or minimisation of risk. Risk management can therefore also be considered as an
aspect of the organisation’s ongoing continuous quality improvement program.
Capital Structure Theories, Valuation of Shares & Efficient Market HypothesisSwaminath Sam
The presentation contains details on Net Income, Net Operating, Traditional and Modigliani & Miller Approach; valuation of shares i.e., different models for valuation of shares in particular CAPM; Efficient Market Hypothesis (EMH) & forms of hypothesis
Bitcoin - Introduction to Virtual Currency / CryptocurrencySwaminath Sam
The power point presentation talks about history of bitcoin and features, it also talks about how it works and what are all the challenges involved in using new innovative financial instrument...
Module – IV Warehousing Trading and Settlement:
Warehousing and Warehouse Receipts, Storage, practice s in India, Risks in Storage, Structures, Essentials of storage structures, cost of storage/carry, returns of storage cost, warehousing, types of warehouses, Central warehousing corporation(CWC) FCI, functioning, growth, capacity and utilization.
Trading on ‘Commodity Exchanges: the Exchange platform, Exchange Membership, Commodity Brokerage, trading systems, participants in Commodity Markets, Role of speculators, Trading mechanism – Margin Trading, Mark to Market, Conflict Management; Arbitration and International Legal provisions, Market Positions, Order Types, Access to Commodity Exchanges, Volume and Open Interest.
Clearing and Settlement on Commodity Exchanges, Clearing House Operations and Risk Management, procedures, Delivery related issues like delivery centers, Deliverable varieties, Issues related to monitoring and surveillance by exchanges and regulator, Margining Method and the settlement process.
Module – I Commodity Markets and Exchanges:
Growth of Global and Domestic Commodities Derivatives Markets, Agricultural Commodities Market and Non-Agricultural Commodities Markets
Commodity Exchanges: Exchanges around the World and its Importance, Commodity Exchanges in India. National Exchanges and Regional Exchanges, platform – Structure, Exchange memebership, Capital requirements, commodities traded on National exchanges, instruments available for trading and Electronic Spot Exchanges.
Module – II Quality Assurance
Quality Assurance, Concepts of Quality in Commodities, Methods of Quality Assurance GRanding and Standardization: Meaning of grading and Standardization, purpose of grading, advantages of grading, inspection and quality control, Indian standards.
MODULE 4:
Market Risk (includes asset liability management)
Yield Curve Risk Factor-Domestic and global contexts-handling multiple risk factor-principal component analysis- value at Risk (VAR) – implementation of a VAR system- Additional Risk in fixed income markets-Stress testing- Bank testing.
Module – V Regulatory Framework:
FCR Act 1952, FMC and Regulatory structure of commodities Derivatives markets in India (Objective, Functions, Power and responsibilities, Scope of Regulation), Essential Commodities Act and role of central and state Governments, Intermediaries, Investor Grievances and arbitration, Commodities Board in India – Coffee Board of India, Tea Board of India, Spice Board of India, Rubber Board of India, Tobacco Board of India.
Module – III Commodity Derivatives:
Commodity Derivatives: Evolution of Commodity, Derivatives, Evolution of Commodity, Derivatives in India, Types of Derivatives, Other Classifications of Derivatives, Pricing Derivatives, Derivative Markets and Participants, Economic Importance of Commodity Derivatives Markets.
Module - 1 :
The foreign exchange market, structure and organization- mechanics of currency trading
– types of transactions and settlement dates – exchange rate quotations and arbitrage – arbitrage with and without transaction costs – swaps and deposit markets – option forwards – forward swaps and swap positions – Interest rate parity theory.
The Presentation will provide information on History of Constitution, Fundamental Rights, Fundamental Duties, Directive Principles of State Policy, etc...
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
This is a presentation by Dada Robert in a Your Skill Boost masterclass organised by the Excellence Foundation for South Sudan (EFSS) on Saturday, the 25th and Sunday, the 26th of May 2024.
He discussed the concept of quality improvement, emphasizing its applicability to various aspects of life, including personal, project, and program improvements. He defined quality as doing the right thing at the right time in the right way to achieve the best possible results and discussed the concept of the "gap" between what we know and what we do, and how this gap represents the areas we need to improve. He explained the scientific approach to quality improvement, which involves systematic performance analysis, testing and learning, and implementing change ideas. He also highlighted the importance of client focus and a team approach to quality improvement.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
How to Create Map Views in the Odoo 17 ERPCeline George
The map views are useful for providing a geographical representation of data. They allow users to visualize and analyze the data in a more intuitive manner.
How to Split Bills in the Odoo 17 POS ModuleCeline George
Bills have a main role in point of sale procedure. It will help to track sales, handling payments and giving receipts to customers. Bill splitting also has an important role in POS. For example, If some friends come together for dinner and if they want to divide the bill then it is possible by POS bill splitting. This slide will show how to split bills in odoo 17 POS.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
1. Chapter - 1
Introduction: Risk Management
Definition of Risk and uncertainty- Classification of Risk, Sources
of Risk-external and internal. Risk Management-nature, risk
analysis, planning, control and transfer of risk, Administration of
properties of an enterprise, provision of adequate security
arrangements. Interface between Risk and Insurance- Risk
identification, evaluation and management techniques, Risk
avoidance, Retention and transfer, Selecti9on and implementation
of Techniques. Various terminology, perils, clauses and risk covers.
2. INTRODUCTION TO RISK:
The etymology of the word “Risk” can be traced to the Latin word
“Rescum” meaning Risk at Sea or that which cuts.
Risk is associated with uncertainty and reflected by way of charge on
the fundamental / basic i.e. in the case of business it is the Capital,
which is the cushion that protects the liability holders of an
institution. There are multiple definitions of risk. The lists following
under the definition of risk:
• The likelihood and undesirable event will occur.
• The magnitude of loss from an unexpected event.
• The probability that “things won’t go right”.
• The effect of an adverse outcome.
3. Meaning of Risk: A probability or threat of damage, injury, liability,
loss, or any other negative occurrence that is caused by external or
internal vulnerabilities, and that may be avoided through preemptive
action.
Definition of Risk: “a condition in which there exists an exposure to
adversity”
Meaning of Uncertainty: A situation in which something is not
known, or something that is not known or certain.
Definition of Uncertainty: “Situation where the current state of
knowledge is such that (1) the order or nature of things is unknown,
(2) the consequences, extent, or magnitude of circumstances,
conditions, or events is unpredictable, and (3) credible probabilities to
possible outcomes cannot be assigned.
4. Risk Uncertainty
In risk, possible outcomes of an
element or analysis involves risk
of the probabilities of the
alternative are known.
While it is characterized by
uncertainty if the frequency
distribution of the possible
outcomes is not known
Risk is the dispersion of the
probability distribution of the
element being estimated or
calculated outcomes (s) being
considered.
While uncertainty is the degree of
lack of confidence that the
estimated probability distribution is
correct
DIFFERENCES - RISK AND UNCERTAINTY:
5. CLASSIFICATION OF RISK:
A. Strategic risks:
- Business environment
- Business strategy
- Product, distribution and sourcing policies
- Corporate reputation or brand image
- Design and other core expertise
B. Operational risks:
- Management, leadership and decision-making
- Operational processes (product range, distribution
network, procurement and supply chains) and their
management
- Intangible assets
- Compliance with laws, regulations and agreements
- Information management
- Continuity of operations
- Compliance with requirements and responsible practices
6. C. Economic risks:
- Price development of production factors
- Price development of operating costs
- Financial risks & Financial reporting
D. Pure and Speculative Risk
o A pure risk is one in which there are only the possibilities
of loss or no loss (earthquake)
o A speculative risk is one in which both profit or loss are
possible (gambling)
E. Diversifiable Risk and Nondiversifiable Risk
o A diversifiable risk affects only individuals or small
groups (car theft). It is also called nonsystematic or particular
risk.
o A nondiversifiable risk affects the entire economy or large
numbers of persons or groups within the economy (hurricane). It
is also called systematic risk or fundamental risk.
o Government assistance may be necessary to insure
nondiversifiable risks.
7. F. Enterprise risk encompasses all major risks faced by a
business firm, which include: pure risk, speculative risk,
strategic risk, operational risk, and financial risk.
– Financial Risk refers to the uncertainty of loss because
of adverse changes in commodity prices, interest rates, foreign
exchange rates, and the value of money.
Enterprise Risk Management combines into a single unified treatment
program all major risks faced by the firm:
– Pure risk, Speculative risk
– Strategic risk, Operational risk
– Financial risk
G. Accident risks:
- The environment
- Personnel, Property, Business operations and Stakeholders
8. MAJOR PERSONAL RISKS AND COMMERCIAL RISKS:
A. Personal risks:
– Premature death of family head
– Insufficient income during retirement
– Poor health (catastrophic medical bills)
– Involuntary unemployment
B. Property risks: destruction or theft of property, Physical Damage
C. Liability risks: the possibility of being held liable for bodily injury
or property damage to someone else
D. Direct loss vs. indirect loss: To Business
E. Commercial risks:
• Property risks,
• Liability risks,
• Loss of business income,
• crime exposures, human resource exposures, foreign loss
exposures, intangible property exposures, and government
exposures
9. INTERNAL RISKS EXTERNAL RISKS
• Human Factors
• Technology Factors
• Physical Factors
• Organizational and Operational
• Strategic
• Innovation
• Financial
• Natural
• Economy
• Political
• Compliance
• Health and Safety
Risk Management: 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.
10. Nature of Risk Management:
Scientific approach to dealing with pure risks.
Broader than insurance management.
Differs from insurance management in philosophy.
Pure and speculative risk,
Fundamental and particular risk.
Personal Risks, Property Risks, Liability Risks.
Risk arising from failure on part of others.
Fidelity Risks.
Risks due to ownership and use of Transport vehicle.
Objectives of Risk Management:
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.
11. Features of Risk Management:
To create the right corporate policies and strategy.
To management men and machines (processes) effectively.
To evaluate the risks confronted by a business.
To effectively handle, spread, monitor and insure the risks.
To introduce various plans and techniques to minimize the risks.
To give advices and suggestions for handling the risks.
To create risk awareness among the people.
To avoid cost, disruption and unhappiness relating to risks.
To decide which risks are worth taking/pursuing, and which
should be shunned.
To fix the sum assured under the policy and to decide on whether
to insure or not.
To select the appropriate technique or method to manage the
risks.
12.
13. Risk Planning: A Risk Management Plan is a document that a project
manager prepares to foresee risks, estimate impacts, and define responses
to issues. It also contains a risk assessment matrix. Most critically, risk
management plans include a risk strategy. Broadly, there are four
potential strategies, with numerous variations. Projects may choose to:
• Avoid risk — Change plans to circumvent the problem;
• Control / Mitigate risk; — Reduces impact or likelihood (or both)
through intermediate steps;
• Accept risk — Take the chance of negative impact (or auto-
insurance), eventually budget the cost (e.g. via a contingency budget
line);
• Transfer risk — Outsource risk (or a portion of the risk - Share
risk) to third party that can manage the outcome. This is done e.g.
financially through insurance contracts or hedging transactions, or
operationally through outsourcing an activity.
SARA for Share Avoid Reduce Accept, or A-CAT for "Avoid,
Control, Accept, or Transfer"). Risk management plans often
include matrices.
14. Risk Management Includes:
- Risk Management Planning
- Risk Identification
- Qualitative Risk Analysis
- Quantitative Risk Analysis
- Risk Response Planning
- Risk Monitoring and Control
Who uses Risk Management?
• Finance and Investment,
• Insurance
• Health Care
• Public Institutions
• Governments
How to use Risk Management?
1. Allocate responsibilities.
2. Evaluate how Risk Management processes can be best applied
in your national environment.
3. Survey existing skills and do training needs assessment.
4. Catalogue existing sources of data or information that can help
in identifying risks.
5. Flow chart existing processes.
6. Communicate and consult.
7. Obtain IT tools or set up processes for effectively operating a
selectivity system.
8. Provide training in profiling/selectivity skills.
9. Test and gain confidence in the Risk Management process.
15. Identifying Business Risk Exposure:
a) Exposure of Physical Assets / Property: property insurance policies
typically promise to indemnify the insured for damage to covered
property on one of two bases;
1. Replacement Cost: it is also known as re-instatement value, is
the cost at the time of loss to replace destroyed or severely
damaged property with the same or like-kind new property or the
cost to repair damaged property, in each instance without
deduction for any depreciation or obsolescence in property
value.
2. Actual Cash Value (ACV): ACV is the cost presently (not
original purchase price) to replace or repair damage property less
the value of physical depreciation and obsolescence.
Risk Identification: Definition – According to Williams and Heinz, risk
identification is “the process by which a business systematically and
continuously identifies property, liability, and personnel exposures as
soon as or before they emerge.”
16. Types of Financial Asset Exposure:
Credit Exposure: credit exposure is the possibility that customers who
have been granted credit will either fail to pay when payment is due, or
will delay payment and take longer credit than agreed.
Currency Exposure: it involves losses from adverse movements in
foreign exchange rates, both short term and long term
Country Exposure:
Political Exposure:
Regulatory Exposure:
Economic Exposure:
Liquidity Exposure: This is refers to the possibility that the market for a
security, such as a bond or stock might be liquid, so that holders of the
security could have difficulty in selling their holding easily, should they
wish to do so, at a fair price.
17. Exposure to Legal Liability: There are three broad classes of legal
liability
A crime is a legal wrong against society that is punishable
by fines, imprisonment, or death.
A breach of contract is another class of legal wrongs.
A tort is a legal wrong for which the law allows a remedy
in the form of money damages.
The person who is injured or harmed (called the plaintiff or claimant) by
the actions of another person (called defendant or tort teaser) can sue for
damages.
Criminal Law: It involves an offense against society, such as murder,
robbery, or attack. In criminal cases, a state or central govt. brings formal
charges against the accused person, who is called the defendant. Such
formal charges are known as indictments.
Civil Law: It involves lawsuits or disputes between two parties. This
may include a citizen suing another citizen.
18. Torts can be classified into Three Categories:
Intentional Torts: It can arise from an intentional act or omission those
results in harm or injury to another person or damage to the person’s
property.
Absolute or Strict Liability: it means a liability is imposed regardless
of negligence or fault. Absolute liability is also referred to as strict
liability. Some common situations of absolute liability include the
fallowing.
Blasting operations that injure another person,
Manufacturing of explosives,
Owning wild or dangerous animals,
Crop spraying by airplanes,
Occupational injury and disease of employees under a worker’s
compensation law.
Negligence: It is another type of tort that can result in substantial
liability. Because negligence is so important in liability insurances, it
merits special attention.
19. Risk Identification:
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.
Orientation, Risk analysis questionnaires, Exposure
checklists, SWOT Analysis
Insurance policy checklists, Flow process charts, Analysis
of financial statements
Other internal records, Inspections, Interviews,
Brainstorming, Delphi Technique, Interviewing
Root Cause Identification, Assumption Analysis,
Diagramming Techniques
20. Common Risk Identification Methods are:
Objective based risk identification: organization and project teams
have objectives. Any event that may endanger achieving an objective
partly or completely is identified as risk.
Scenario based risk identification: in scenario analysis different
scenarios are created. e.g. a market or battle. Any event that triggers an
undesired scenario alternative is defined as risk.
Taxonomy based risk identification: it involves a breakdown of
possible risk sources. Based on the taxonomy and knowledge of best
practices, a questionnaire is complied. The answered to the question
reveals risk.
Common risk checking: in several industries, lists with known risks
are available. Each risk in the list can be checked for application to a
particular situation.
Risk charting: This method combines the above approaches by listing
resources at risk, threats to those resources, modifying factors which
may increase or decrease the risk and consequences which are to be
avoided.
21. Risk Management Methods:
1. Loss Control: Risk control is a generic term to describe techniques for
reducing the frequency or severity of losses. It includes fallowing types.
• Risk avoidance
• Risk / loss prevention
• Risk / loss reduction
• Risk retention
• Risk transfer
2. Loss Financing: it refers to techniques that provide for the funding of
losses after they occur. It involves transferring the risk or retention of risk.
3. Internal Risk Reduction: risk reduction involves methods that reduce
the severity of loss or the likelihood of the loss from occurring. It can be
avoided by taking appropriate steps for prevention of risk or avoiding loss,
such steps include adaption of safety include adaption of safety program,
installation of waste material.
22. Risk Analysis / Risk Assessment:
It is a process of defining and analyzing the dangers to individuals,
business and government agencies posed by potential natural and human
caused ad versed events. Risk Assessment can be done Quantitatively
and Qualitatively.
Process of Risk Assessment:
Step 1: the initial step is to look for hazards. Take a tour of the
workplace and check for potential dangers concentrate on anything with
the potential to cause serious harm to employees.
Step 2: the second step is to decide who might be harmed and how .
Step 3: with this step one must calculate whether there have been
enough precautions put into place to encounter the hazard.
Step 4: the next step is to record findings. Risk assessment check must
show that it has dealt with all obvious hazards.
Step 5: the final step is to review risk assessment procedures and make
revisions if necessary.
23. Perils and Hazards: Types of Perils by Ability to Insure
Hazards : Tangible and Intangible
24. Advantages of Risk Management:
It encourages the firm to think about its threats. In
particular, risk management encourages it to analyze risks
that might otherwise be overlooked.
In clarifying the risk, it encourages the firm to be better
prepared. In other words, it helps the firm to manage itself
better.
It lets the organization prioritize its investment and
reduces internal disputes about how money should be
spent.
It reduces manpower duplication (e.g. one manager can
often oversee both quality and environment risk).
It reduces duplication of systems. Integration of
environment and health and safety systems are one
instance.
25. Disadvantages of Risk Management:
If risks are improperly assessed and prioritized, time
can be wasted in dealing with risk of losses that are not
likely to occur.
Unlikely events do occur but if the risk is unlikely
enough to occur it may be better to simply retain the risk
and deal with result if the loss does in fact occur.
Qualitative risk assessment is subjective and lacks
consistency
Prioritizing the risk management processes too highly
could keep an organization form ever completing a project
or even getting started. This is especially true if other
works is suspended until the risk management process is
considered complete.