Most ordinary insurance policies do not cover against earthquake damage. More
Risk assessment and risk management is the assessment, identification and prioritization of known or possible risks. A risk assessment should be implemented in a business setting to minimise, control or monitor the impact of emergency or crisis events.
Risks can come in a number of different ways and include:
- Legal issues
- Natural disasters
- Uncertainty in financial markets
- Credit risks
- Project failures
- Deliberate attacks
- Serious illness
Risk management and assessment strategies include avoiding the risk, reducing the probability of the risk and reducing the negative impact of the risk. Prioritizing the risks with the highest probability of occurring and with the highest probability of loss is essential, with lower risks handled in order or importance.
Risks can directly decrease profitability and cost effectiveness, cut productivity and quality, and can negatively impact your company’s reputation and service along with your core brand value.
Risk management should:
- Be tailored to your business needs
- Be structured
- Be responsive to relevant changes
- Be well researched and based on up to date information
- Be part of your companies decision making process
- Be inclusive
- Take all factors into account
After you have identified the risks that could impact your business you will need to develop an analysis and define a framework to mitigate the risks. The steps you need to take will depend on the scenario and the severity of the potential impact to your organisation. On the next page you’ll find the four major categories of risk management.