Page 47 - RISK Management IC86 Ebook
P. 47
The Insurance Times
Chapter - 5
Important Steps in Risk
Management Decision Making
Process - Part 2
Step 2. Examining the feasibility of alternate risk
management techniques
n The process of risk management involves either preventing /
minimizing losses or paying for those losses which will
inevitably occur. The former technique relates to Risk Control;
the later relates to Risk Financing.
These can be broadly considered as under :-
A) Risk control to prevent/minimise losses
l Exposure avoidance
l Loss prevention
l Loss reduction
l Segregation
l Contractual transfer
B) Risk financing to pay for losses
Essentially an organization can finance its risk costs in
the following ways:
i) Retention
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