Chapter –Two Risk and Insurance Mgt A n Individual
Assignment
Individual Assignment (10%)
A clear, brief and detail explanation is required for each question and you must be able to
exemplify for all individual answers by yourselves (Please don’t copy from your materials and
don’t copy each other since a copy paste will not have a marks!!!)
1. What is the meaning of risk management?
2. Explain the objectives of risk management both before and after a loss occurs.
3. Describe the steps in the risk management process.
4. a. Identify the sources of information that a risk manager can use to identify loss
exposures.
b. What is the difference between the maximum possible loss and probable maximum
loss?
5. a. Explain the meaning of risk control.
b. Explain the following risk-control techniques.
1. Avoidance
2. Loss prevention
3. Loss reduction
6. a. Explain the meaning of risk financing.
b. Explain the following risk-financing techniques.
1. Retention
2. Noninsurance transfers
3. Insurance
7. What conditions should be fulfilled before retention is used in a risk management
program?
8. Avoidance is a risk-control technique that can be used effectively in a risk management
program.
a) What is the major advantage of using the technique of avoidance in a risk
management program?
b) Is it possible or practical for a firm to avoid all potential losses? Explain your
answer
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Chapter –Two Risk and Insurance Mgt A n Individual
Assignment
9. A risk management program must be implemented and periodically monitored to be
effective. This step requires the preparation of a risk management policy statement. The
cooperation of other departments is also necessary.
a) What benefits can the firm expect to receive from a well-prepared risk management
policy statement?
b) Identify several departments within a firm that are especially important in a risk
management program.
Case Study
Foods Company is a cold storage warehouse, storing and delivering frozen foods for
supermarkets. Established in 1999, Foods Company employs 30 people.
The warehouse has a good sprinkler system with a regular maintenance programme in
place
Goods inwards are stored on pallets and stacked in chiller units or freezer compartments
Temperatures in the cold storage ranges from -5 degrees Celsius in the chiller units to -30
degrees Celsius in the freezer units
An accident book is kept on site. Normally there are only a few minor injuries recorded but the
last month has seen 2 employees go off ill and subsequently diagnosed with asthma. A potential
cause is the dry atmosphere when working in extreme cold temperatures increases the likelihood
of employees showing signs of asthma.
A bi-weekly meeting takes place on site between the site manager and the health and safety
manager to discuss risk management matters. The agenda for today’s meeting is risk assessment
with a review of health and safety hazards and the matters discussed are restricted to operational
risks.
Based on the above case you should give detail, clear and appropriate reasons for your
alternative answer and you should justified the reason that each other alternative are not an
answer for the questions!!!
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Chapter –Two Risk and Insurance Mgt A n Individual
Assignment
1. Which one of the following would help reduce the level of risk when working in the
warehouse?
A. Training employees in working in cold conditions.
B. Increasing the frequency of meetings.
C. Regular reviews of the accident log.
2. What corrective action could the two managers consider to reduce the likelihood of more
employees going off sick with asthmatic conditions?
A. Reduce the length of time employees are exposed to cold conditions by job
rotation.
B. Increase training and the supervision of staff wearing protective clothing.
C. Provide employees with a booklet on keeping warm.
3. The health and safety manager confirms the company has insurance to compensate
employees who are injured or suffer ill-health at work. Which statement best explains why
the company has this insurance?
A. The company has 25 or more employees.
B. Insurance to cover the payment of compensation to injured employees is a
compulsory class of insurance.
C. The employees who are away sick may seek compensation from Foods Company.
4. To ensure employees are complying with health and safety standards in the warehouse,
which directive controls could be instigated?
1) Protective suits are available for employees to wear to provide extra warmth in the
freezer units.
2) Protective suits are provided and employees have to follow the guidelines on
when to wear the suits.
3) There is a requirement on employees to check that protective suits are in good
condition.
4) Employees are trained to recognize the symptoms of hypothermia.
A. 1 and 2.
B. 1 and 4.
C. 2 and 3.
5. Which of the following is relevant to the agenda for today’s meeting?
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Chapter –Two Risk and Insurance Mgt A n Individual
Assignment
A. The company has changed its transportation supplier and delivery using the new
company starts next month.
B. The company has a new supplier of ice-cream products and it is anticipated the product
will be in great demand by its customers.
C. The company has updated its health and safety risk assessment and new safety rules and
procedures are being.
By
Endris Ali
DU, Dep’t of Logistics and Transport Management
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