What Are The Tools of Risk Management?
There are four basic tools of risk management: • Avoidance • Retention • Loss Prevention and Reduction • Transfer (to another entity) Avoidance: Many times it is not possible to completely avoid risk but the possibility should not be overlooked. For example, at the height of a blizzard, Car Fleet may not release vehicles for travel until the weather begins to clear, thus avoiding the risk of auto accidents during severe weather. Some buildings on campus have had repeated water problems in some areas – by not allowing storage of supplies in those areas, some water damage claims may be avoided. Retention: It may be determined that it is more practical to retain a risk even though other methods of handling the risk are available. For example, the University retains the risk of loss to fences, signs, parking meters, gates and light poles because of the difficulty of enumerating and evaluating all of these types of structures. When losses occur, the cost of repairs is absorbed by the campus
