risk remedies and treatment by derek hendrikz

Risk Remedies

and Treatment

Copyright © 2008 Derek Hendrikz Consulting

derek hendrikzwww.derekhendrikz.com

Copyright © 2014

Derek Hendrikz Consulting

www.derekhendrikz.com

2 risk remedies…

Take the RISK or

Don’t take the Risk!!!

www.derekhendrikz.com

Dealing with Risk:

Risk Manageme

nt

Take the Risk

Retain Mitigate

Don’t take the Risk

Transfer Avoid

www.derekhendrikz.com

www.derekhendrikz.com

ACAT risk treatment…

• Avoidance (Eliminate)• Control (Mitigate)• Accept (Retention)• Transfer (Outsource or Insure)

www.derekhendrikz.com

…most effective way of risk management … implies not taking the risk at all or not performing the activity that could carry risk… www.derekhendrikz.com

Risk Avoidance

…avoidance has a weakness… ‘NO RISK = NO RETURN’

www.derekhendrikz.com

Risk Avoidance

…risk control involves methods that reduce the severity of the loss or the likelihood of the loss form occurring… it thus mitigates…

www.derekhendrikz.com

Risk Control

…risk retention is accepting the loss when it occurs… an acceptable practice if the cost of insurance is greater than the possible total loss sustained… www.derekhendrikz.com

Risk Acceptance

…all risk that is not avoided or transferred is retained by default… war is an good example of non- retained, non-avoided risk resulting in risk retention… www.derekhendrikz.com

Risk Acceptance

…risk transference is a process of shifting the responsibility or burden to another party or individual, which is mostly done through legislation, contract, insurance or other means… www.derekhendrikz.com

Risk Transference

…it can also refer to the shifting of a physical risk or part thereof elsewhere…

www.derekhendrikz.com

Risk Transference

…insurance as method of risk transfer is often seen as incorrect since it is a post-event compensatory method (yet the risk of compensation is still transferred)…www.derekhendrikz.com

Risk Transference