1. Economic: Risks arising from operations, economy, financial marketplace or entrepreneurial activities
2. Legal: Risks inherent in compliance or arising from statutory liability.
3. Political: risks arising from changes in law, government reinterpretations, changes in government policy or changes in the political environment. 
4. Social: risks arising from public relations, loss of reputation, damage to brand, cultural issues, social direction or social media. 
5. Physical: risks arising from property, people, or information 
6. Juridical: risks arising from a jury judge’s decision or from court or jury attitudes.

The process of managing uncertainty of exposures that affect an organization’s assets and financial statements using five steps:

 I.A.C.F.A.

Identification - Analysis - Control - Financing - Administration

1. Checklists and Survey 
2. Flowchart 
3. Insurance Policy Review 
4. Physical Inspections 
5. Compliance Review 
6. Procedures and Policies Review 
7. Contract Review 
8. Experts 
9. Financial Statement Analysis 
10. Loss Data Analysis

1. Risk Assessment: Assess exposures that cannot be easily measured by traditional statistical or financial methods and to understand their impact on the organizations ultimate risks performance.
2. Financial Assessment: identify and assess those broad exposures that have a financial impact on the organization but that may be difficult to quantify. 
3. Loss Data Assessment: used to identify and apply various methods of assessing loss data and to analyze the impact of those losses may have on an organizations risk management policy and ultimate total cost of risk.

1. Loss Projections or forecasts
2. Cash discounting and net present value (NPV) Calculations
3. Cost-Benefit Analysis
4. Total Cost of Risk Calculations and analysis

1. Human Approach: People Cause Accidents
2. Engineering Approach: things and pent-up energy cause accidents
3. Systems Approach: Systemic failures or weaknesses cause accidents

"P.A.R.T.S."

1. Avoidance
2. Prevention
3. Reduction (pre-loss & post Loss)
4. Segregation/Separation/Duplication
5. Transfer (contractual, physical or both)

the acquisition of internal and external fund to pay losses at the most favorable cost.

1) Retention

2) Transfer

3) Insurance

1) Implementation

2) Monitoring

Definition: sum of all costs and expenses associated with the risk management function of an organization

INSURANCE COSTS + RETAINED LOSSES + RISK MANAGEMENT DEPARTMENTAL COSTS + OUTSIDE SERVICES FEES + QUANITIFIED INDIRECT COSTS

1. Assist with making effective risk management decisions
2. Measure progress toward risk management
3. Focus and promote safety and loss control
4. Provide management and employee incentives
5. Assist with accurate pricing of products and services
6. Assist with effective management of financial budgets

any conscious action or inaction to minimize, at the optimal cost, the probability, frequency, severity, or unpredictability of loss.

1) IDENTIFICATION OF EXPOSURES

2) INCIDENT ANALYSIS

3) COST-BENEFIT ANALYSIS

1. Checklists & Surveys
2. Flowchart
3. Insurance Policy Review
4. Physical Inspections
5. Compliance Review
6. Internal Policies & Procedures Review
7. Non-Insurance Contract Review
8. Experts (3rd Party Firms)
9. Financial Statement Analysis
10. Loss Data Analysis
11. Incident Analysis
12. Cost Benefit Analysis

1. Avoidance
2. Prevention (ex. Driver Safety)
3. Reduction (pre-loss & post-loss)
1. Pre-Loss (fire suppression equipment)
2. Post-loss (Claims Administration)
4. Segregation/Separation/Duplication
1. Goal is to reduce overal severity
1. Segregation: An Isolation of an exposure from others (i.e. Computer Room)
2. Separation: Spread of exposures or activities over several locations
3. Duplication: the use of bak-ups for critical systems or operations
5. Transfer (Contractual, Physical or both)

1. Hold Harmless or Indemnification Agreement
1. Affirmative assumption of the financial consequences for liability of another through a contract.
2. Exculpatory Agreement or Clause
1. Pre-Event Exoneration of the fault of one party that results in any loss or specified loss to another.
3. Waiver of Subrogation
1. Pre-Event Relinquishment of the right of one or both parties insurers to seek recovery from a culpable party’s insurance carrier for loss parents made to the insured.
4. Limit of Liability or Liquidated Damages Cause.
1. Pre-event limitation of the amount, type, or method of calculation of damages available by one or both parties to an agreement.

1. Limited (mine): Assumed responsibility for indemnity’s liability for indemnities negligence only
2. Intermediate (mine & ours): Limited + Responsibility for full indemnification of the indemnity if there is any negligence on the indemnitor’s part or if the indemnity is partially negligent, he/she pays 100%.
3. Broad (yours, mine & ours): Limited+Intermediate+ indemnity agrees to be responsible for indemnities’ sole negligence; can include other parties negligence.

the organizations systems cause accidents, even though individuals do what they are told to do with the tools and equipment provided

1. Risk Identification and classification, training, equipment maintenance
2. Tracking risk exposures on a flowchart
3. Hazard Evaluation Index

1. Grass Roots Support
2. Top Management Support
3. Incentive and Reward Programs
4. Accountability for Risk Control Initiatives
5. Budgeting for Safety
6. Willingness of all to compromise and Cooperate

1. Acquisition and Allocation of Resources:
1. Internal
2. External
1. Agent/Broker
2. Insurance Carrier
3. Consultant
4. Third Party Administrator
5. Legal Counsel
2. Consideration of Alternative Treatments andy their relative costs and benefits
3. Effective Communication throughout the Organization and with Third Parties
1. Information Resource
2. Claim Reviews/Suit Committees
3. Stewardship Report
4. Newsletters and Bulletins
5. Make Site Visits, Educate and Attend Unit Organizational Meetings
6. Employee and Third Party - Post claim/loss response showing genuine care & concern

1. Unsafe Acts or Behaviors
2. Unsafe Conditions
3. Uncontrollable Events

1. Elimination of the Hazard
2. Substitution of a less hazardous substance or process
3. Engineering Controls - physical modifications designed to reduce the potential for injury
4. Administrative Controls: Rules or procedures to reduce the degree for potential injury (safety meeting)
5. Personal Protective Equipment
6. Training

1. Management Leadership
2. Accountability, Responsibility, and Authority
3. Employee Participation
4. Hazard Assessment and Control
5. Employee information and Training
6. Accident Reporting, investigation and Analysis
7. Post-Injury Management
8. Evaluation of Program Effectiveness

1. CONSTRUCTION: Material Used to Construct the Building
2. OCCUPANCY: Occupant Operations in the Building
3. PROTECTION: Safeguards, Equipment and Measures provided by the building owner to minimize hazards (ex. Sprinkler System)
4. EXPOSURE: Sources of potential damage external to the building (proximity to other buildings, etc).

1. CARGO TRANSPORTATION
2. SERVICE/DELIVERY
3. PRIVATE PASSENGER
4. NON-OWNED USE

1. Management Policy Statement
2. Driver Qualification
3. Disciplinary Procedures
4. Driver Training
5. Responses to Accidents
6. Vehicle Inspection and Maintenance Program
7. Monitoring and Surveillance

1. Surface Materials
2. Spill Control
3. Surface Continuity
4. Illumination and Visibility
5. Stair Design
6. Maintenance and Inspection
7. Other Engineering Controls
1. Slip resistant Surfaces
2. Slip Resistant Footwear
3. Floor Markings in walkways and work areas
4. Floor Gutters and Drains

The applied Science of equipment and workplace design intended to maximize productivity by reduction operator fatigue and discomfort.  Fitting the work environment to the person rather than the person to the environment.

1. Repetitive Tasks
2. Excessive Force
3. Awkward or deviated posture including reaching
4. Static Loading
5. Personal Risk Factors
6. Environmental Risk Factors.

COMPUTER WORKSTATION

Risk Factors:

1. Repetitive Activity
2. Awkward Posture
3. Static Loading (upper extremities & lower Back)
4. Pressure on tissues on sharp edges (wrists, legs)
5. Personal Factors:
1. Individual Physiology and stress
2. Outside Activities
3. Lack of Awareness of Factors.

COMPUTER WORKSTATION

Risk Control Measures

1. Adjustable Workstation
2. Ergonomic Chairs
3. Workspace Organization
4. Adequate Lighting and Glare Control
5. Noise Control
6. Computer Mouse

MANUAL MATERIAL LIFTING

Risk Factors

1. Frequency of lift or move
2. Load Weight
3. Awkward Posture
4. Improper Lifting Techniques
5. Personal Risk Factors

MANUAL MATERIAL LIFTING

Risk Control Measures

1. Reduce Size and weight of containers
2. Job Rotation
3. Replace with lighter material
4. Outsource Handling Operations

SUBSTANCE ABUSE PROGRAM

Risk Control Measures

1. Clearly Stated Policies and Procedures
2. Clearly Stated Drug and Alcohol Testing Protocols
3. Substance abuse program training for managers and supervisors
4. Employee Education
5. Employee Assistance Programs (EAP)

WORKPLACE VIOLENCE

Factors:

1. Gaps in Employment
2. False or incomplete Application
3. Unfavorable or False References
4. Drug or Alcohol use
5. fixation with weapons
6. Frequent or graphic talk of violence
7. Insubordination or violent acts
8. Instability

WORKPLACE VIOLENCE

Risk Control Measures

1. Physical Controls
2. Hiring Practices
3. Administrative Measures
4. Training
5. Program Evaluation

EMPLOYMENT PRACTICES

Risk Control Measures

1. Established to Address all applicable laws
2. Communicated to all personnel
3. Clearly Understood and universally applied
4. Regularly Reviewed for content, legal conformity and intent.

CYBER BUSINESS

Risk Controls

1. Avoidance: Don’t store “personal data”
2. Establish Protocols for collection, storage, access, dissemination and protection of electronically stored information.

CLAIMS MANAGEMENT

Definition

ROLE OF CLAIMS MANAGEMENT

is to assist the Risk Manager in:

1. Using claim data to improve business performance
2. Reducing the total cost of risk
3. Adding value to the risk management program
4. Assuring claims management team members, internal or external, are providing an appropriate level of service and following best practices.

1. Insured Plan: 
1. Bundled Insurance Program
2. Loss Sensitivity: Low - includes guaranteed cost, dividend, small deductible or SIR and retro plans.
2. Third-Party Administered Plan:
1. Unbundled Insurance Program
2. Loss Sensitivity: moderate
3. Self-Administered Plan:
1. Unbundled
2. Loss Sensitivity: Extremely High

1) Investigation

2) Evaluation

3) Damage

4) Reserving

5) Documentation

CLAIMS MANAGEMENT

INVESTIGATION details:

1. Reporting
1. Single Point of Contact for all reports
2. Reported ASAP
3. If 1st notice is summons/complaint - defense counsel needs to be notified ASAP
2. Responding 
1. Prompt contact with Claimant = single most outcome determinative element 
2. Adjuster contact claimant within 24 hours
3. Initiate Medical Case Management
3. Gathering info
1. Prompt & thorough investigation is critical
2. Facts: Who, Where, what, when, how
4. Documentation

CLAIMS MANAGEMENT

EVALUATION Details:

1. Coverage
1. Reservation of rights letter
1. Notifies insured of coverage issues
2. Avoids Waiver and Estoppel Arguments
3. Identifies all policy provisions that are at issue
2. Non-Waiver Agreement (better alternative to ROR Letter)
1. Permits continued processing of claim while preserving right to decline
2. Is a bilateral Agreement
3. Insured must be notified immediately once all coverage issues are resolved.
3. Timing
1. Responding to the reservation of rights letter or non-waiver letter
2. Duty to defend vs. indemnify
4. Methods
1. Declaratory Judgement Action
2. Arbitration/Mediation
3. Assignment
5. Concerns
1. Continued Relationship
2. Funding Costs of Resolution

CLAIMS MANAGEMENT

LIABILITY Details:

1. Early in investigation, it is important to consider theories of liability that may be used for or against the organization.
2. Theories of Liability (Civil Law)
1. Contractual Liability
2. Tort Liability
1. Strict
2. Intentional
3. Unintentional
3. Fault vs. Causation
4. Negligence per se

CLAIMS MANAGEMENT PROCESS

RESERVING Details:

1. Setting Reserves too low can:
1. Overstate Organizations Assets
2. Insolvency or bankruptcy in the future
3. Problems with industry Ratings
4. Problems with Regulators
2. Setting Reserves too high can result in:
1. Understating Organizations Assets
2. Organization mistakenly believing it does not have the financial resources to pursue profitable ventures or underwrite additional business
3. Creating problems with tax reporting and stockholders

CLAIMS MANAGEMENT PROCESS

RESOLUTION Details...

1. Five Non-Mutually Exclusive Possibilities
1. Payment in Full
2. Negotiated Settlement
3. Denial
4. Litigation/Alternative Dispute Resolution (ADR)
5. Subrogation/Recovery

1. Mediation
1. Informal Process; no evidence
2. Neutral third party acts as facilitator to explorer settlement
3. Mediator has no power to impose decision
2. Arbitration
1. Semi-formal Process; summary documentary evidence only
2. Neutral third party or panel with neutral umpires oversight
3. Arbitrators decision is usually final
3. Mini-trials/Summary Jury Trials
1. Quasi-judicial format, abbreviated testimony and/or evidence
2. Fact finder will be mini-jury or magistrate
3. Generally final.

ROLE OF A TPA

"Third-Party Administrator"

1. Usually retained by the individual organization - carrier approval may be required
2. Adjusts and resolves claims within the organizations’s SIR using internal funds
3. Reports to carrier on high valued claims (%50 of retention or “red flags”)
4. Will request reimbursement from carrier of funds expended in excess of the retention on reimbursement policies
5. TPA represents the organization

1. Accessibility
2. Risk Management information Systems
3. Flexibility in Account Handling
4. Qualifications of Staff
5. Best Practices and Quality Control
6. Industry Experience and Reputation
7. Unbundled Services
8. Pricing and Value-Added Services

1. Management Profile
2. Workloads
3. Size of Firm
4. Attorney’s firm’s current client base
5. Experience Level, Education & Training of the individuals related to industry of org.
6. Attorney’s reputation in the insurance/business community
7. Fee Structure

1. Any critical incident that threatens or causes injury to people or a disruption of normal business operations. OR “An event that occurs with an impact that exceeds the normal response capacity of the affected organization

1. Disaster
2. Catastrophe
3. Critical Incident
4. Emergency

1. Potential to significantly damage reputation or can be entirely self contained
2. Affects one or more asset classes (people, property, income)
3. Interrups Operations
4. May damage or strengthen consumer, shareholder and employee confidence
5. May involve multiple audiences and stakeholders or may affect only a few
6. May be of interest to the medial for a long period or may be noted and forgotten 
7. May be unique and entirely unpredictable or may be largely anticipated.

1. the act or process of managing a crisis to prevent the occurrence of a catastrophic loss, if possible, and reduce the impact of catastrophic losses to the origination, including its reputation and brand.

1. Comprehensive: consider ant date into account all hazards, phases and stakeholders
2. Progressive: anticipate future disasters
3. Risk-Driven: use sound risk management principles
4. Integrated: Insure unity of effort among all levels of the enterprise
5. Collaborative: Broad & sincere relationships among individuals and organizations
6. Coordinated: Synchronize the actives of relevant stakeholders to achieve common purpose
7. Flexible: use creative and innovative approaches to solve challenges
8. Professional: value a science and knowledge based approach on education, training, experience, ethical practice and continuous improvement.

1. Economy of Operations
2. Legality of Operations
3. Maintain a positive Public Image
4. Risk Management: obtain full mgmt. support and commitment to the program

1. Restore and/or maintain operations
2. Sustain Profits and stable earnings
3. Work towards Growth
4. Maintain a positive public Image
5. Risk Management: to effectively and economically minimize the operational and financial impact of the crisis.

1) Disaster Planning

2) Preperation

3) Response

4) Recovery

OPERATIONAL COMPONENTS

of Crisis Management

1. Lists of response team members
2. list of non-employees that should be contacted
3. Local emergency Contacts
4. Aerial photo of site for location
5. Assembly areas/on-site shelter locations
6. Area maps including evacuation routes
7. communication Outpost information
8. Emergency Procedures

PHYSICAL COMPONENTS

of Crisis Management

1. Master Keys/Codes
2. Communication Equipment
3. Cameras
4. Battery Operated Radio
5. Battery Operated Lighting 

COMMUNICATION SYSTEMS

of a Crisis Manangement System

1. External
1. General Public
2. Media
2. Internal
1. Provide Periodic Contacts prior to Crisis
2. Visitor Communication

CRISIS MANAGEMENT

Key Elements of Reputation Management

1. Key Corporate and Strategic Asset
1. Strategic, proactive & ongoing
2. perception is everything
2. Crisis Management and Reputation
1. Quickly and accurately address and issue 
2. Build a network of internal & external advocates
3. Prevent issues from escalating into crisis
3. First 24 Hours is Critical
4. The Art of Crisis Communication
5. Fact-Driven Story delivered quickly
6. Message Discipline
1. Acknowledge responsibility if it exists
2. Control the Agenda
7. Restoring a damaged Reputation