What is risk management?
Risk management is a planned and systematic process to reduce and/or eliminate the probability that losses will occur in a specific setting. It consists of three distinct, yet interrelated areas: 1) risk identification and loss prevention; 2) loss reduction; and 3) risk financing. To be most effective in the hospital setting, risk management involves a multidisciplinary and proactive approach. The first component involves those activities related to risk identification and loss prevention. Generally, these activities include the identification and correction of situations or problems which may give rise to events or incidents of potential liability for the hospital, its employees, physicians and other health care providers. These activities are vital to successful risk management since in most cases, the cost of preventing a liability claim is far less than the cost of resolving the claim after it occurs. Loss prevention activities also consist of the planning and presentation of regul
Risk management is a process of proactively identifying issues and assessing their potential impact on the University. Taking a proactive approach allows the University to anticipate risk and make informed business decisions. Depending on the circumstances, the University may choose to either avoid risk or assume it. What types of risk is the University concerned about? While we often associate risk with financial matters, e.g. investments, insurance, loss prevention, there are many types of risk. The University broadly defines risk as any issue that could impact the University’s ability to meet its business objectives. In other words, risk applies to many different aspects of our work. Specifically, the University is concerned with five risk areas.
Risk management process of helping a business to evaluate risk, assess its potential impact, and plan the appropriate action to take in order to avoid or control risk. While it is never possible to eliminate all risks, the objective of risk management is to implement cost effective processes that reduce risks to an acceptable level, reject unacceptable risks, and transfer other risks through insurance and other means. Risk management is for businesses because preventing losses is preferable to the inconvenience and disruption caused by even a minor incident. As part of SIA’s risk management services, we help our customers identify the factors that drive insurance costs, as well as the hidden cost of reduced productivity. SIA also offers loss data analysis to highlight unforeseen loss trends and provides recommendations that can promote loss control and risk management programs.
The objective of risk management is to reduce different risks related to numerous types of threats caused by environment, technology, humans, organizations and politics. Risk management is a structured approach to managing uncertainty through tools such as risk assessment, strategic management, and mitigation of risk using managerial resources. Basic strategies involve decisions about transferring the risk to another party, avoiding the risk, reducing any negative effects of the risk or accepting some or all of the consequences of a particular risk. Traditionally, risk management focuses on minimizing third-party liability risks stemming from physical or legal causes that can cause financial harm to the institution (e.g. natural disasters or fires, accidents, deaths and lawsuits), while financial risk management, typically referred to as “Enterprise Risk Management” or “ERM” focuses on bottom-line risks that can be managed using financial instruments.
