Page 45 - RISK Management IC86 Ebook
P. 45
The Insurance Times
n AGREEMENTS - often enjoy legal enforceability but the
term is intended to connote less formal arrangements
between parties that may fall outside legal sphere.
Prioritizing of Risks
l In the process of identifying the hazards and assessing risks,
it is necessary to discover likely sources of hazards, likely
area of operation as well as their effects. A loss may affect
the three "P"s i.e. People, Property or Profits or a combination
of any of these three.
l Three things need to be identified in respect of each hazard:
a) What is the likely event that cause the loss,
b) The likely cause of loss &
c) What or how much is at risk.
l It is the probability of the event occurring which converts a
'hazard' into a'risk'.
l Having a clear understanding of all risks allows an organization
to measure and prioritize them and take appropriate actions to
reduce losses. In order that the concept of prioritizing is
followed whereby the risks with the greatest loss and the
greatest probability of occurring are handled first, and risks
with lower probability of occurrence and lower loss are
handled later.
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