Assessment 2 Report for risk

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Assessment 2 Report for risk

Assessment 2 Report

Hierarchy of Controls

  • Elimination
  • Design it out This is the best solution as it is the most effective

  • Substitution
  • Use something else – the second best solution, it is quite effective but a total elimination would be better

  • Engineering controls
  • Isolation and guarding – if you cannot eliminate or substitute, it must be controlled through engineering processes.

  • Administrative Controls
  • Training and work scheduling – this is the control that should be done if the engineering control is not effective.

  • Personal Protective Equipment
  • Last resort – should only be done if there is no other way to protect or control the risks.

    Reduction in Likelihood of risks

    To reduce the likelihood of risks occurring it is important to assess the causes of the risks and ensure that that cause of the risks are reduced. If the cause of the risk cannot be reduced than the impact of the risks should be reduced.

    It is important that each risk is assessed and the best strategies to reduce the likelihood are chosen. Risks are easily occurred and must be prevented as effectively as possible. the likelihood can usually be reduced through the hierarchy of control procedures.

    Reduction in consequence of risks

    To reduce the consequence of risks, it is important to identify what causes the risks and what will affect the risk. Things such as planning and protection will help reduce the consequence.

    The risks should be controlled in a way that forces the least impact consequence to occur such as offering a substitute that will reduce the consequence or using protective equipment to help minimise the consequence.

    Retention of risks

    Risk retention Involves accepting the loss, or benefit of gain, from a risk when it occurs. True self-insurance falls in this category. Risk retention is a viable strategy for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained.

    Risk Aversion

    Risk aversion is a concept in economics and finance, based on the behavior of humans, while exposed to uncertainty to attempt to reduce that uncertainty.

    Risk aversion is the reluctance of a person to accept a bargain with an uncertain payoff rather than another bargain with a more certain, but possibly lower, expected payoff. For example, a risk-averse investor might choose to put his or her money into a bank account with a low but guaranteed interest rate, rather than into a stock that may have high expected returns, but also involves a chance of losing value.

    Transfer of Responsibility of Risks

    The term of ‘risk transfer’ is often used in place of risk sharing in the mistaken belief that you can transfer a risk to a third party through insurance or outsourcing. In practice if the insurance company or contractor go bankrupt or end up in court, the original risk is likely to still revert to the first party. As such in the terminology of practitioners and scholars alike, the purchase of an insurance contract is often described as a “transfer of risk.” However, technically speaking, the buyer of the contract generally retains legal responsibility for the losses “transferred”, meaning that insurance may be described more accurately as a post-event compensatory mechanism.

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    Assessment 2 Report for risk
    Last updated: Feb 2024

    Page 1

    ough insurance or outsourcing. In practice if the insurance company or contractor go bankrupt or end up in court, the original risk is likely to still revert to the first party. As such in the terminology of practitioners and scholars alike, the purchase of an insurance contract is often described as a “transfer of risk.” However, technically speaking, the buyer of the contract generally retains legal responsibility for the losses “transferred”, meaning that insurance may be described more accurately as a post-event compensatory mechanism.

    Treatment Plan

    Activity: Identify the relevant risks in the restaurant

    Register

    Activity: Identify the impact of risks in the restaurant

    Risk Treatment plan

    Effectiveness of the Insurance

    Cost

    The cost of the insurance is $250,000. This is quite high compared to other competitors and the price they offer. Although the price may be high, the quality of the insurance and reliability is high which is important.

    Reductions in Impact

    To reduce the impact it is important that the insurance has all the precautions required such as all the cases and incidents that the insurance covers. The accidents must be common and the insurance company must offer a high reimbursement of claims. Lastly using person protective equipment to minimise the impact that the risk has on the employees.

    Reductions in Likelihood

    To reduce the likelihood it is important to follow the 5 steps of the hierarchy of control. The first step is to eliminate any threats or risks. Then try to substitute the risks or ensure that there is another strategy. Engineering controls are important for effectively and systematically controlling the risks. Administrative control is about using authority to reduce the likelihood.

    Reductions in Occurrence

    To reduce the occurrence the company must identify why the risks occur and what can be used to prevent the risks from occurring again. This could be because of safety issues or wrong equipment etc. to reduce the occurrence it is important to replace any unsuitable equipment and train the staff to monitor and resolve risk issues.

    Evidence

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    Assessment 2 Report for risk
    Last updated: Feb 2024

    Page 2

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