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
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