RISK MANAGEMENT 4
RISK RESPONSE n Risk retention n Risk reduction n Risk transfer n Risk avoidance RETENTION n Small losses expected, estimated or predicted n Likelyhood of loss could be absorbed by the business, project or individual n Likelyhood of dmages occuring relatively small REDUCTION n Ensuring awareness of a existence of a risk n Sharing of risk with other parties n Enquiring and asking the right questions regarding a particular risk n Physical protection to reduce the risk from occurring TRANSFER n Make sure the party is aware of risk being transferred to that party n Insurance is most common for risk transfer n Liability of risk could occur long after the project has been completed (latent defects) AVOIDANCE n Rescinding of contract by employer due to failure of carrying out of a contract