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Chapter 05 student - Chapter Objectives Give examples of...

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Chapter Objectives Give examples of the use of risk avoidance and explain when it is an appropriate risk management technique Differentiate between frequency reduction and severity reduction and give examples of each Explain three different forms of loss control, differentiated on the basis of timing issues, and provide examples of each List several potential costs and benefits associated with loss control measures Explain what is meant by risk retention Describe the nature of risk transfer as a risk management tool and list five forms of risk transfer Explain how risk management adds value to a corporation 1
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(1) Risk Avoidance 2
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(2) Loss Control 3
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Loss Control Loss Control – two types 4
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Focus of Loss Control 5
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Domino Theory Employee accidents can be viewed in light of the following steps Each step can be thought of as a domino that falls, which in turn causes the next domino to fall 6
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Figure 5-1: Heinrich’s Domino Theory 7
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Types of Loss Control 8
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Falling Dominoes Losses are not always easily quantifiable. In fact, there are some things that aren’t at all quantifiable: 9
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Falling Dominoes A City-subcontracted plumbing company started work on several feet of storm drain piping. On the first day, time only permitted that the trench be dug to about 8 foot deep. Overnight, it rained and water filled the trench. The next day, the water in the trench was pumped out. The remainder of the trench was dug out with a backhoe. The backhoe was then parked a couple of feet away.
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