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