risk management. risk is inevitable from your research of local businesses, what risk was...
TRANSCRIPT
RISK MANAGEMENT
RISK IS INEVITABLE
From your research of local businesses, what Risk was unavoidable and why?
Speculative Vs. Pure Risk Speculative = Taking a chance for profit or loss Pure = Threat of a loss to your business without any
possibility of gain
PURE RISK - CRIME
Small businesses 35% more likely to be victims of crime
Shoplifting – Most common retail crime (13 BILLINON in losses per year) How Prevented? Training / Lighting / Mirrors and Cameras / Tags / Guards
PURE RISK - CRIME
Employee Theft– 15x more likely to steal than customers (20 BILLION in loss per year) How Prevented? Hire honest people – background checks & polygraphs / Information to
Employees/ Locks / Watch Trash / Safeguard Keys
Burglary – Breaking into a building to commit a felony How Prevented? Site Selection / Locks / Alarms / Guards / Lighting
PURE RISK - CRIME
Robbery – Taking of property by force of threat Stolen Credit Cards Bad Checks Counterfeit Money Cyber Crime
Hackers or Viruses
Target / Home Depot / Us Postal
PURE RISK – OTHER TYPES
Fires / Floods / Tornados / Earthquakes / HurricanesAccidents and Injury
Negligence – Failure to exercise reasonable care
RISK MANAGEMENT STRATEGIES
Preventing or Reducing business loss
1. Identifies Risks
2. Estimating Potential Losses from Risks
3. Best Way to Address Risks Avoidance / Reduction / Transfer / Retention
RISK MANAGEMENT STRATEGIES
Risk Avoidance Making decisions to try and reduce the risk exposure of your
business
Ex. Selecting a safe location
Risk Reduction Business Floor plan Design / Training / Equipment Inspection and
Repair / Product Safety Testing / Security
RISK MANAGEMENT STRATEGIES
Risk Transfer Insurance!
Premium – The amount paid for insurance
Main 4 Types
Property / Casualty / Life / Workers’ Compensation
RISK MANAGEMENT STRATEGIES
Property - Fire or FloodCasualty - Liability for an Accident or Protection Against
TheftLife - Protection Against the Death of an OwnerWorkers’ Compensations – Required by the Government –
Pay for Medical and Income Benefits to Employees Injured on the Job or due to Job Related Illnesses
RISK MANAGEMENT STRATEGIES
Risk Retention When a Business cannot obtain insurance or cannot afford the
policies
To offset the Risk, the owner may save money to cover the cost if the risk actually occurs