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How if if the risk happens the insurance company pays

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Unformatted text preview: Ezzat Georgy Risk Transfer: Insurance The insurance premium is usually much smaller than the cost of the risk. How ??? If If the risk happens, the insurance company pays to have the risk resolved. If the risk does not take place, the insurance company keeps the premium. Dr. Maged Ezzat Georgy Risk Risk Mitigation Unacceptable risks are those risks surpassing the risk tolerance level. However, it is not always possible to avoid or transfer them them (as part of a risk avoidance / transfer strategy). Dr. Maged Ezzat Georgy Risk Mitigation Mitigation is a strategy where some work is done on unacceptable risks to reduce either: ◦ Their probability of occurrence, or ◦ Their impact Th to a point where their severity falls below the maximum risk tolerance level. Dr. Maged Ezzat Georgy Alternative Alternative Response Plans When considering a given project risk, you may be in a situation where more than one response strategy could be adopted. Benefits vs. costs should be evaluated in search for costs the best strategy to take. Check page 159 of your textbook for interesting example. Dr. Maged Ezzat Georgy Concept of Risk Owner...
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