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Risk Management

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Risk management is described as reducing liability and loss through a planned program of: ... It is significantly less expensive to manage a risk prior to an ... – PowerPoint PPT presentation

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Title: Risk Management


1
Chapter 8
  • Risk Management

2
Risk Management
  • Risk management is described as reducing
    liability and loss through a planned program of
  • -Education
  • -Prevention
  • -Control
  • -Evaluation

3
Benefits of Risk Management
  • It is significantly less expensive to manage a
    risk prior to an occurrence than after a crisis
    has occurred
  • Protects the financial well-being of the
    organization
  • Reduces loss of time, materials, personnel and
    participants
  • Maintains participant safety, satisfaction and
    loyalty

4
Benefits of Risk Management
  • Upholds moral principles of service orientation
  • Creates a safer work environment
  • Encourages active involvement of all staff
    members
  • Expenditures associated with loss can usually be
    reduced, allowing the event managers to allocate
    savings to other areas that may increase the
    value of event-related experiences

5
Risk-Management Strategies
  • Understanding and identifying the risks
    associated with each type of resource utilized in
    an event can provide a systematic and practical
    means of mitigating the greatest number of
    possible occasions for loss
  • Risk-management practices result in
  • Fewer accidents
  • Increased productivity
  • Higher morale and favorable attitudes among all
    stakeholders

6
Liability and Loss
  • Lack of planning, poor communication, lack of
    technical knowledge or skills, false assumptions,
    carelessness, and a lack of attention to detail
    are frequently mentioned as contributing to a
    loss occurrence
  • Omissionnot doing something that should have
    been done
  • Commissiondoing something that should not have
    been done

7
Underlying Mechanisms in Risk Management
  • Identify all risksi.e., weather, accident and
    injury, technology, mismanagement
  • Assess risk occurrences
  • Assign value to each potential occurrence
  • Develop data systems to record and monitor all
    risk occurrences
  • Develop education and training program for
    employees, volunteers, and participants
  • Develop the risk-management plan and process,
    including reports, emergency response procedures,
    standards for performance and reporting, and
    process-evaluation materials

8
Education
  • A suitable educational program should be
    developed by identifying the most typical types
    of problems that might arise
  • Understand event parameters design an
    educational strategy to address these issues
  • Research reduces risk share findings with those
    involved with the event in an appropriate and
    effective manner

9
Event Risks
  • Health, safety, and food-quality issues
  • Unexpected weather occurrences
  • Accidents and injuries
  • Structural failures
  • Technology failures
  • Contractual difficulties
  • Negative publicity
  • Impact of competition

10
Event Risks
  • Theft
  • Vandalism
  • Fraud
  • Sexual harassment
  • Misuse of facilities
  • Civil disturbances and the potential for
    violence
  • Perception of problems associated with these
    issues that may lead to a crisis

11
Event Parameters
  • Projected attendance figures
  • Demographics of anticipated attendees
  • Risks inherent in the type of activities being
    offered at the event
  • Probability of occurrence of particular types of
    incidences
  • All impact the process of identification,
    prioritization, and education about risk

12
Standards and Codes
  • Food-handling regulations
  • Sanitation codes
  • Building and construction codes
  • Electrical codes
  • Traffic codes
  • Other regulations that have been developed to
    improve safety

13
Education and Training of Staff and Volunteers
  • Includes certification training to qualify for a
    particular set of responsibilities - first aid
    provider, emergency medical service responder,
    food handler, traffic control, lifeguard, and
    other specific, certifiable programs
  • Others will require in-house training
  • All staff and volunteers should be trained as
    risk managers - all are aware of and actively
    involved in the process of risk management

14
Education and Training of Staff and Volunteers
  • Staff and volunteers must be taught to be
    proactive, to take immediate and appropriate
    action at the first sign of a potential risk
    situation
  • General training should include visitors so that
    all stakeholders are conscious of the need to be
    personally responsible for themselves and for the
    well-being of others

15
Local Safety Officials
  • Provide staff and volunteers with the most
    up-to-date information and training open the
    lines of communication between your event workers
    and public safety professionals
  • Early contact and familiarity with safety
    officials may prove to be instrumental should a
    crisis arise during an event that requires
    collaborative efforts between your staff and
    outside help

16
Education and Training of Guests
  • Invited guests to the event, defined as those
    that pay an admission price or are actively
    recruited and welcomed to the property, create
    the greatest potential for accident, injury and
    associated loss
  • Onsite communication including focused efforts at
    informing participants of potential risks
    associated with the event is critical in reducing
    the occurrence of loss

17
Prevention
  • Reduce the frequency and severity of risk events
  • Risk Matrix Occurrence and Severity
  • Low frequency/Low severity
  • Low frequency/High severity
  • High frequency/Low severity
  • High frequency/High severity

18
Prevention
  • Prevention also requires record keeping
  • Past records are a key to understanding possible
    future risk
  • Creating a master chart depicting all known risk
    factors and their occurrence and severity is an
    important step in preventing loss

19
Prevention Strategies
  • Four major preventative actions can be taken
    based on the frequency and severity of a
    particular risk
  • Eliminate the risk entirely
  • Reduce the risk significantly
  • Assume the risk partially or totally
  • Transfer the risk to insurers or participants

20
Control
  • Feedback through accident reporting, data
    collection, and analysis helps the event
    organizer to control risk in the future
  • Establish loss prevention goals on an annual
    basis
  • Identify additional training needs
  • Schedule training opportunities early in the
    event cycle

21
Evaluation
  • All accidents and incidents should be documented
    using standardized reports completed by
    appropriate members of the event team
  • Corrective actions taken during the course of the
    event should also be noted so that these changes
    will be incorporated into subsequent
    risk-management plans

22
Evaluation
  • Training of staff and volunteers regarding risks
    should also be evaluated through surveys of those
    receiving the training and the examination of all
    actions taken by staff members during the event
  • Final analysis of the safety and risk management
    of the event should be solicited from the local
    service providers including police, safety,
    traffic, and health officials
  • Evaluation must be properly documented and
    combined with an implementation strategy

23
Liability and the Law
  • Event organizers assume several responsibilities
    in relation to their guests
  • The responsibility to provide adequate
    supervision
  • The responsibility to provide appropriate and
    well-conducted activities
  • The responsibility to provide safe and
    appropriate environmental conditions

24
Liability and the Law
  • Liability is closely related to the idea of
    responsibility in that liability means the level
    of obligation that one party owes another
  • Someone is liable if they are responsible to
    another due to the relationship that has been
    established with the other party

25
Liability and the Law
  • Event organizers have a responsibility to those
    who attend the event and those who involve
    themselves in the event in other ways such as
    volunteers, supporters, and employees
  • The event organizers may fail to do something
    that they should have done (omission) or may do
    something that they should not have done
    (commission)

26
Negligence
  • Negligence can be described as failing to conform
    to acceptable standards of care resulting in some
    form of injury to another party if such behavior
    is determined to be the proximate cause for the
    injury
  • Loss, damage or harm is characterized as
  • economic loss
  • physical pain or suffering
  • emotional distress
  • physical impairment

27
Prudent Person
  • The measure of negligence is sometimes equated to
    what is called the prudent person standard
  • Prudence means using good judgment, being wise
    and sensible
  • Prudent professional standards suggests that
    individuals and groups who offer events to the
    public are expected to have professional training
    and judgment beyond that of the average prudent
    person

28
Forseeability
  • Prudence includes the idea of forseeability,
    suggesting that a prudent person would anticipate
    certain situations that may cause harm to others
  • Exercise foresight in creating a safe,
    well-supervised environment for the guests
  • Forseeability is greatly aided by the experience
    level of the event coordinators
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