Page 217 - RISK Management IC 86

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Q8. Identify the (a) similarities and (b) differences
between personal risk management and
corporate risk management.

Ans. Risk Management techniques are more easily applicable
to large organizations as they have more exposure units,
financial strength and technical expertise. However, small
traders and individuals can also apply risk management
principles.

An individual is exposed to many types of risk that affect
his or his family's welfare, like :
(i) Death, sickness, and injury
(ii) Loss of or damage to property
(iii) Incurring liability to compensate others for personal

injury or damage to property

The occurrence of property damage and liability risks
result in reduction in the individual's wealth. Other risks
can also cause loss of income due to incapacity caused
by sickness or accident. Sometimes additional expense
may be incurred to minimize such expenses, e.g,
expenditure on medical treatment.

The cost of many losses though can be measured more

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