Term
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Definition
| A conscious act, or decision not to act, that reduces the frequency and/or severity of losses and makes losses more predictable. |
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Term
| Name two Risk Management Techniques. |
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Definition
| Risk Control or Risk Financing. |
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Term
| Name the six broad Risk Control Techniques. |
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Definition
| Avoidance, Loss Prevention, Loss Reduction, Separation, Duplication, Diversification |
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Term
| What is the Risk Control Technique - Avoidance? |
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Definition
| Ceasing, or never undertaking an activity, so that the possibility of a future loss occurring from that activity is eliminated. (Can be proactive or reactive - is considered when the expected values outweigh the expected benefits.) |
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Term
| What is the difference between Proactive Avoidance and Reactive Avoidance risk control methods? |
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Definition
| Proactive seeks to avoid the risk before it exists (such as choosing not to engage in an activity); Reactive seeks to eliminate a loss exposure that already exists (such as discontinuing an existing activity). Both methods avoid loss exposures from future activities. Reactive does not eliminate loss exposures from past activities. |
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Term
| What is the Risk Control Technique - Loss Prevention? |
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Definition
| It reduces the frequency of a particular loss. |
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Term
| What is the Risk Control Technique - Loss Reduction? |
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Definition
| It reduces the severity of a particular loss. |
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Term
| What are two broad categories of Loss Reduction Measures? |
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Definition
| Pre-loss measure (applied before loss occurrs and is aimed to reduce the extent of damages incurred from a single event); Post-loss measure (applied after the loss occurrs and focuses to halt the spread or counter the effects of a loss). |
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Term
| What is the Risk Control Technique - Separation? |
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Definition
| It isolates loss exposures from one another to minimize the adverse effect of a single loss. (The intent is to reduce severity of an individual loss at a single location.) |
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Term
| What is the Risk Control Technique - Duplication? |
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Definition
| It uses backups, spares or copies of critical property information, or capabilities, and keeps them in reserve. |
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Term
| What is Risk Control Technique - Diversification? |
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Definition
| It spreads the loss exposures over numerous projects, products, markets and regions. |
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Term
| Name four Risk Control Techniques that are used to control support Risk Control Goals? |
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Definition
| Implement an Effective and Efficient Risk Control Measure, Comply with Legal Requirements, Promote Life Safety, Ensure Business Continuity. |
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Term
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Definition
| The portion of fire safety that focuses on the minimum building design, construction, operation, and maintenance requirements necessary to assure occupants of a safe exit from the burning portion of the building. |
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Term
| Describe the advantages of using a Cash Flow Analysis for the selection of Risk Control measure. |
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Definition
| It helps the organization's value-maximization goal by providing a basis for comparison for all value-maximizing decisions. It increases efficiency by reducing unnecessary expenditures on risk control. |
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Term
| Describe the disadvantages of using Cash Flow Analysis for the selection of risk control measures. |
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Definition
| Weakness of assumptions that often must be made to conduct the analysis, difficulty in accurately esimating future cash flows, and lack of consideration of nonfinancial goals or slection criteria. Example, legal and social responsibility goals are not directly considered in cash flow analysis. |
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Term
| List the types of state or federal statutes an organization may need to consider when selecting risk control measures in order to comply with legal requirements. |
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Definition
| Fire safety coes, environmental regulations, workers compensation laws and disability laws. |
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Term
| Identify the possible consequences an organization can face for failure to comply with legal requirements. |
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Definition
| Fines, sanctions, or liability for faulire to comply with legal requirements. |
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Term
| Identify the issues regarding fire, health, and safety a risk management professional should consider when assessing an organization's Life-Safety Exposures. |
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Definition
| Consider the characteristics of the people who occupy a building and the type of building occupancies (commercial, personal use). |
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Term
Identify causes of loss an organization should consider when promoting Life Safety. |
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Definition
| Fire safety, product safety, building collapse, industrial accidents, environmental pollution, and exposureto hazardous activities that may create the possibility of injury or death. |
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Term
| Identify the factors insurance producers and underwriters commonly consider when examining loss exposures in commercial properties. |
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Definition
| Construction, occupancy, protection, and environment. |
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Term
| What Risk Control Techniques are commonly used to control liability loss exposures? |
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Definition
| Avoidance, Loss Prevention, and Loss Reduction. |
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Term
| Describe Loss Prevention and Loss Reduction measures an organization might use to control work related injury or illness. |
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Definition
Loss Prevention - Education, Training, and Safety Measures.
Loss Reduction - Emergency Response Training, and Rehabilitation Management. |
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Term
| What is the purpose of Business Continuity Management? |
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Definition
| Identify potential threats and provide method of ensuring continued business operations. It is designed to meet the organizations post-loss goals of survival and continuing operations. |
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Term
| Identify potential situations that business continuity management might address to help achieve an organization's goal of survival and continuity of operations afer a loss. |
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Definition
| Interruptions from property losses, IT problems, human failures (fraud), loss of utility services or infrastructure, reputation losses, and human asset (personnel) losses. |
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Term
| List the six steps in the Business Continuity Process. |
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Definition
| Identify the organizaton's critial functions, Identify the risks or threats to the organization's critical functions, evaluate the effect of the risks on those critical functions, develop a strategy, develop a plan, monitor and revise. |
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Term
| Identify guidelines for design of an effective Business Continuity Plan. |
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Definition
| Design a clear plan that can be quickly read and understood, provides copies of the plan to all relevant parties, and provide appropriate training. |
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Term
| List the content commonly contained in Business Continuity Plans? |
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Definition
| Strategy the organization will follow to manage crisis, information about the roles and duties of various individuals in the organization, steps that can be taken to prevent any further loss or damage, Emergency response plan to deal with life and safety issues, Crisis management plan to deal with communcation and reputation issues, Business Recovery and Restoration Plan to deal with losses to property, process or products, and Access to Stress Management and Counseling for affected parties. |
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