Page 49 - RISK Management IC86 Ebook

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means of reducing the cost of risk apart from eliminating or
reducing the risk itself.

n Risk and loss reduction is an area that should be of vital concern
to:
(a) the management of each individual organisation
(b) the insurance industry
(c) the community as a whole.

There are a number of different means by which loss
may be prevented or minimised:
a) Prior to a loss happening
l Eliminating the possibility of its occurrence - avoiding

the risk, e.g. using non - inflammable liquid
l Reducing the probability of its occurrence - improving

the risk, e.g. clearing waste at more frequent intervals.

b) Upon a loss happening
These are concerned with:
l Detecting the occurrence and raising an alarm;
l Minimising the effect and size of loss.

c) Following the happening of a loss
These are concerned with limiting the effects of loss by:
l Minimising the extent of loss

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