Most ordinary insurance policies do not cover against earthquake damage. More
There are four major categories of risk management:
- Risk Avoidance means to eliminate the risk or to not become involved in a potentially risky situation. This could include not using a particular mode of transportation or purchasing a product that has known risks.
- Risk Reduction means to mitigate or reduce the severity of the risk. An example of this would be to install smoke alarms and sprinkler systems to reduce the risk of a fire.
- Risk Sharing or risk outsourcing is when an outside party shares the burden of the risk or loss, as in the case of an insurance company.
- Risk Retention is when a company or organization accepts the loss when it occurs.
After you have investigated and thoroughly researched and assessed the risks pertaining to your organisation it is essential to create a risk management plan. An effective risk management plan should include safety controls and protocols relevant to protecting your employees, customers and business operations. Responsibility for risk controls and management should be allocated to the appropriate department or individuals to ensure nothing is ignored or left to chance.
An example of a risk would be a computer virus, which could have a devastating effect on your business running and operations. A risk management plan would include having suitable anti-virus software, firewalls and IT safety protocols in place, backups of all essential data files and an offsite server. The risk management implementation plan would contain a schedule and programme for control implementation and a list of the individuals responsible for the actions.
By properly assessing and prioritizing risks you can mitigate the loss or damage to your business operations. A comprehensive risk management assessment analysis and risk assessment plan will pay dividends in reducing operational downtime and ensure the continued and smooth running of your business.