Page 8 - RISK Management IC86 Ebook

P. 8

Risk Management

fraction or as a percentage but always in the range of Zero
to One i.e. The likelihood of an event is assigned a numerical
value between 0 and 1, with those that are impossible
assigned a value of 0 and those that are inevitable assigned
a value of 1..
n 'Zero' indicates state of intrinsic impossibility &
n 'One' indicates state of absolute certainty

l Insurers generally use the word 'Risk' in two distinctive
meanings viz.
n as the subject-matter of insurance or
n different types of perils such as Fire, Flood etc..

Risk Possibilities

Risk is created by
l Activities : Commercial; Constructional; Financial;

Manufacturing Professional;
l Relationship to People or Property
l Laws & Regulations
l Environmental, Physical, Social, Political Situation.
l Risks result in injury or loss for a number of reasons and

often in combination -
i. Lack of awareness i.e failure to recognise possibility

or circumstances of Risk,

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