RISK ASSESSMENT

Introduction

Risk assessment is a process that involves evaluation of the impact and its probability of occurring. Risk is a function of the likely hood of a given threat – sources exercising a particular potential vulnerability and the resulting impact of that adverse event on the organization.

Preventive and mitigative risk factors

Risk mitigation are the steps followed to reduce the adverse effects. There are four types of risk mitigation strategies that are unique to business continuity and disaster recovery. It’s important to develop a strategy that closely relates to and matches your company profile, these strategies include:

a)      Risk acceptance

It doesn’t reduce any effects, however, it’s still considered a strategy. This strategy is a common option when the cost of other risk management options such as avoidance or limitations may outweigh the cost of risk itself. A company that does not want to spend a lot of money on avoiding risks that does not have a high possibility of occurring will use the acceptance strategy.

b)      Risk avoidance

This is the vice versa of risk acceptance strategy. It is any action that avoids any exposure to the risk whatsoever. It is usually the most expensive of all the risk mitigation strategies. Example;

1)      Not buying a business or property in order to not take on the legal liability that comes with it.

2)      Not flying in order not to take the risk that the airplane were to be hijacked.

c)      Risk limitation

This is the most common risk strategy used by businesses. It limits a company’s exposure by taking some actions. It’s a strategy employing a bit of risk acceptance along with a bit of risk avoidance, or an average of both. An example of risk limitation is a company accepting that a disk drive may fail and avoid a long period of failure by having backups.

d)     Risks transference

It is the involvement of handling risk off to a willing third party. An example is numerous companies outsourcing certain operations such as customer services, payroll services etc. this can be beneficial to a company if a transfer risk isn’t a core competence of that company. It can also be used so a company can focus more on their core competence.

e)      Periodically re asses risks that are accepted in ongoing process as a normal feature of business operations and modify mitigation measures.

f)       Design a new business process with adequate built in risks control and containment measures from the start.

g)      Risk sharing

It is defined as sharing with another party the burden of loss or benefit of gain, from a risk and the measures to reduce a risk you can hence transfer a risk to a third party through insurance and outsourcing. In practice, if an insurance company or contractor go bankrupt or end up in court, the original risk is still likely to revert to the first party as such in the terminology of practioners are scholars alike, the purchase of an insurance contract is often described as transparence risk. Example; A personal injuries insurance policy doesn’t transfer the risk of a car accident to the insurance company. The risk still lies with the policy holder namely the person who has been involved in an accident. Insurance policy simply provides that if an accident (the event) occurs involving the policy holder, that is, commensurate with the suffering/damage.

h)      Risk reduction or optimization.

Involves reducing the severity of the loss or the likelihood of the laws from occurring. Example; sprinklers are designed to put out the fire to reduce the risk by fire, this method may course a greater loss by damage hence may not be suitable.

i)        Risk retention

This involves accepting the loss or benefits of gain when it occurs. True self-insurance falls in this category. It is a viable strategy for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained. All risks that are not avoided or transferred are retained by default. This includes risks that are so large or catastrophic that they either cannot be insured against or the premiums could be unfeasible. Example; War is example since most properties and risks are not insured against risks, so the loss attributed by war is retained by the insured.

Hierarchy of prevention and control measures

Employers need to assess the risks for their staff and then preventive measures or controlled measures have to be derived from these assessments. The types of measures can be classified:-

a)      Elimination of hazards

b)      Minimizing or separating the hazards from the works by;

1)      Technical measures (example; encasing, exhausted)

2)      Organizational measures (Example; only qualified employees are allowed to do specified work.

3)      Personal measures ( Example; wearing PPE)

4)      Behavioral measures (Example; Peer observations)

Legislation requires following the hierarchy in order to always select the most effective type of measure. Preventive measures aim at avoiding risks whereas control measures are put in place in order to reduce and manage risks. To combat the vast number of very different risks, for example, slipping, falling, developing muscular skeletal disorders (MSD) radiation stress etc. Researchers, technicians and practitioners have developed an even higher number of preventive and control measures. This means employer need guidance in order to choose the most efficient measure.

General Principals of prevention

a)      Avoiding risks

b)      Evaluate the risk which cannot be avoided

c)      Combating the risks at source

d)     Adapting the work to individual, especially as a regard to workplaces, choice of work, equipment, and the choice of working and production method with a view in particular.

e)      Adapting to technical progress

f)       Replacing the dangerous by the non-dangerous or less dangerous

g)      Developing a coherent overall. Prevention policy which covers technology, organizational work, working conditions, social relationships and the influence of factors related to the working environment.

h)      Giving collective protective measures priority over individual protective measures.

i)        Giving appropriate instructions to the workers.