Brown RMIN 5100s test 1 questions and answers 2024
Categories of commercial loss exposures
1. property loss
2. personnel loss
3. liability loss
4. net income loss
Property loss
-tangible (real estate, personal property)
-intangible (patent, copyright)
Personnel Loss
death, disability, retirement, injury of employees
liability loss
your responsibility for bodily injury, property damage, or financial loss to someone
net income loss
reduction in income due to direct loss
Risk management process
1. Identify loss exposures
2. Measure and analyze the loss exposures
3. Consider and select the appropriate risk management techniques
4. Implement and monitor the risk management program
identify loss exposures
first step and most important in the risk management process
How to identify loss exposures
-document analysis
-compliance reviews
-inspections
-expertise
Ways to identify loss exposures with document analysis?
1. risk assessment questionnaires and checklists
2. financial statements
3. contracts
4. insurance policies
5. organizational policies
6. flowcharts & organization charts
7. loss histories
Step 2: Measure and Analyze Loss Exposures
involves estimating the likely significance of possible loss exposures based on:
frequency, severity, total dollar losses, maximum possible losses, probable
maximum losses (PML), and timing
high frequency, low severity
funded reserve (retain) or loss prevention
low frequency, low severity
unfunded retention
high frequency, high severity
avoidance, captive or risk retention group, loss prevention/reduction
low frequency, high severity
insurance or loss reduction
implement and monitor the chosen techniques
, -often require cooperation among multiple departments
-reviews are needed to ensure expected results are achieved
-if needed, adjusts should be made
Good RM heuristics
-dont risk a lot for a little
-never risk more than you can afford to lose
-consider the odds
Controlling common causes of property losses
most losses result from a chain of events, but some are caused by the convergence
of several unrelated events
Approaches to risk control
-engineering approach
-human behavior approach
Engineering approach to risk control
attacks hazards by reviewing and improving the design and location of properties
and equipment to reduce the number of hazards
Human behavior approach to risk control
attacks hazards by modifying people's behavior to reduce the frequency of unsafe
acts
Common property exposures
-Fire
-Burglary, Robbery and Employee Theft
-Explosion
-Windstorm
-Flood
-Earthquake
Common property exposures- fire
requires heat source, oxygen, fuel, and an uninterrupted chain reaction
ways to reduce risk with fire
-use less flammable construction types
-have fire stops, fire walls, and fire dampers
-fire extinguishing
burglary
theft by forcible entry
robbery
use (or threat) of force against a person to commit theft
employee theft
theft by an employee against their employer
prevention techniques for burglary, robbery, & employee theft
locks, bars on windows, break resistant glass, safes/vaults, accounting controls,
alarms, guards, security cameras, bag-checks, & background checks
Common property exposures- explosion
extremely rapid combustion-almost instantaneous fire engulfing a large quantity of
materials in their entirety
What are the most common causes of explosions?
-flammable liquids, vapors, or gases
-excessive dust
-commercial explosives
What are some explosion prevention techniques?
Categories of commercial loss exposures
1. property loss
2. personnel loss
3. liability loss
4. net income loss
Property loss
-tangible (real estate, personal property)
-intangible (patent, copyright)
Personnel Loss
death, disability, retirement, injury of employees
liability loss
your responsibility for bodily injury, property damage, or financial loss to someone
net income loss
reduction in income due to direct loss
Risk management process
1. Identify loss exposures
2. Measure and analyze the loss exposures
3. Consider and select the appropriate risk management techniques
4. Implement and monitor the risk management program
identify loss exposures
first step and most important in the risk management process
How to identify loss exposures
-document analysis
-compliance reviews
-inspections
-expertise
Ways to identify loss exposures with document analysis?
1. risk assessment questionnaires and checklists
2. financial statements
3. contracts
4. insurance policies
5. organizational policies
6. flowcharts & organization charts
7. loss histories
Step 2: Measure and Analyze Loss Exposures
involves estimating the likely significance of possible loss exposures based on:
frequency, severity, total dollar losses, maximum possible losses, probable
maximum losses (PML), and timing
high frequency, low severity
funded reserve (retain) or loss prevention
low frequency, low severity
unfunded retention
high frequency, high severity
avoidance, captive or risk retention group, loss prevention/reduction
low frequency, high severity
insurance or loss reduction
implement and monitor the chosen techniques
, -often require cooperation among multiple departments
-reviews are needed to ensure expected results are achieved
-if needed, adjusts should be made
Good RM heuristics
-dont risk a lot for a little
-never risk more than you can afford to lose
-consider the odds
Controlling common causes of property losses
most losses result from a chain of events, but some are caused by the convergence
of several unrelated events
Approaches to risk control
-engineering approach
-human behavior approach
Engineering approach to risk control
attacks hazards by reviewing and improving the design and location of properties
and equipment to reduce the number of hazards
Human behavior approach to risk control
attacks hazards by modifying people's behavior to reduce the frequency of unsafe
acts
Common property exposures
-Fire
-Burglary, Robbery and Employee Theft
-Explosion
-Windstorm
-Flood
-Earthquake
Common property exposures- fire
requires heat source, oxygen, fuel, and an uninterrupted chain reaction
ways to reduce risk with fire
-use less flammable construction types
-have fire stops, fire walls, and fire dampers
-fire extinguishing
burglary
theft by forcible entry
robbery
use (or threat) of force against a person to commit theft
employee theft
theft by an employee against their employer
prevention techniques for burglary, robbery, & employee theft
locks, bars on windows, break resistant glass, safes/vaults, accounting controls,
alarms, guards, security cameras, bag-checks, & background checks
Common property exposures- explosion
extremely rapid combustion-almost instantaneous fire engulfing a large quantity of
materials in their entirety
What are the most common causes of explosions?
-flammable liquids, vapors, or gases
-excessive dust
-commercial explosives
What are some explosion prevention techniques?
