8. HAZARDS
• Hurricanes and tornadoes during their seasons
• Earthquakes
• High hazard, poorly maintained dams
• Airlines with poor safety records
• Power production systems with either dangerous technologies or poorly
maintained transmission systems
9. VULNERABILITIES
• Vulnerability is an
assessment of how well
or how poorly protected
you are against an event
• If you have a hazard you
may or may not be
vulnerable to it
• Live in the flood plain –
vulnerable to floods
• Live on high ground –
not vulnerable to floods
10. VULNERABILITIES
• Vulnerabilities may be reduced by mitigation measures (building construction,
land use control, maintenance, etc.)
• Or by the level of preparedness you have achieved (well trained and
equipped emergency teams, plans, exercises, etc.)
11. IMPACT
• Assessment of interaction of hazard effects with your vulnerabilities
• Scalar based on the two key variables – hazard strength and vulnerability
level
12. PROBABILITY
• A mathematical assessment of how likely it is that a specific event will occur
• Based on a wide variety of factors – history, global warming, infrastructure
and demographic changes, new industries, changes in your activities and
processes, etc.
13. Perils
A peril is something that can cause a loss. Examples include
falling, crashing your car, fire, wind, hail, lightning, water, volcanic
eruptions, choking, or falling objects
23. Risk.
Risk is the chance or
probability that a person will
be harmed or experience an
adverse effect if exposed to a
hazard. It may also apply to
situations with property or
equipment loss.
24. Types Of Risk
Pure risk
exists when there is uncertainty as to whether
loss will occur
No possibility of gain is presentedonly the
potential for loss
25. Types Of Risk
• Speculative risk exists
when there is uncertainty about
an event that can produce
either a profit or a loss
26. Types Of Risk
• Fundamental risks affect
the entire economy or large
numbers of people
or groups within the
economy. Examples of
fundamental risks are high
inflation, unemployment, war,
and natural disasters such as
earthquakes, hurricanes,
tornadoes, and floods
27. Types Of Risk
• Particular risks are risks
that affect only individuals or
small group and not the entire
community. Examples of
particular risks are burglary,
theft, auto
accident, dwelling fires. With
particular risks, only individuals
experience
losses, and the rest of the
community are left unaffected
29. Kinds Of Risk
Property risks
Risk that property may
be damaged,
destroyed or stolen
For example, lightning,
tornadoes, hurricanes,
explosions, riots,
collisions, falling
objects, floods,
earthquakes, freezing,
etc.
30. Kinds Of Risk
Financial risk
Include credit risk, foreign
exchange risk, commodity risk,
and interest rate risk
These risks must be identified and
assessed in order for the firm to
achieve its business goals
