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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.
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
Unacceptable risks are those risks surpassing the risk
However, it is not always possible to avoid or transfer
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
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
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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- Winter '14