Risk Management and Insurance

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ACTIVITY 1

How can we reduce or totally eliminate hazards in all aspects of Risk Management, site a
scenario where hazard is being removed?

Risk management is important for every business. It removes the potential problems that a
company may face in the future. Risk management is the process of identifying, assessing and
controlling threats to an organization's capital and earnings. These threats, or risks, could stem
from a wide variety of sources, including financial uncertainty, legal liabilities, strategic
management errors, accidents and natural disasters. It encompasses the identification, analysis,
and response to risk factors that form part of the life of a business. Effective risk management
means attempting to control, as much as possible, future outcomes by acting proactively rather
than reactively. Therefore, effective risk management offers the potential to reduce both the
possibility of a risk occurring and its potential impact.
Businesses face many risks, therefore risk management should be a central part of any
business' strategic management. Risk management helps you to identify and address the risks
facing your business and in doing so increase the likelihood of successfully achieving your
businesses objectives. Also a business may have hazards that will be a potential cause of these
risks. In order to eliminate this, a business must plan to be created well. The business must
identify the risks in order for them to ensure that no problems will be encountered. In order to do
this, the business must make risk control measures. Risk control measures are actions that are
taken in response to a risk factor that has the potential to cause an accident or harm in the
workplace. The control measures can either be designed to reduce the risks or eliminate them
completely, with the latter obviously being preferred. Control measures follow a hierarchical
pattern, with each step being worked through and implemented to control and minimise the risk
identified.
We could see this situation when programmers are coding for a certain type of
application. In order to make sure that no bugs will occur, they run multiple tests. There they will
see what might occur when they launch this application. This may also eliminate potential risks
by controlling some aspects in the software. By doing flawless codes, the coders may ensure that
no hazards will be seen in their application.