INTRODUCTION
Risk can be controlled before it happens. The risk manager has some ability to control the amount and timing of these costs. Successful loss control efforts reduce the amount of loss costs given that some losses occur even when loss control efforts are effective. An efficient risk financing program minimizes the impact of these losses on profit. Risks can be controlled by various techniques as follows.
MAIN BODY
Risk avoidance: This means that the chance of loss has been eliminated because some areas the risk is very high, investing in that area is very risky, the best alternative is avoidance. Some risks are unavoidable, for example firms or individuals cannot avoid the risks of bankruptcy, the liability suit, or the risk of premature death. The exposure to loss can often be reduced but not eliminated. For other exposures, avoidance is the best alternative. The best rule is that when the chance of loss is high and loss severity is high, avoidance is often the best and sometimes the only practical alternative.
Loss prevention: successful loss prevention activities lower the frequency of losses. The prevention activities lower the frequency of losses. The foremost purpose of loss prevention is to preserve human life. That is a risk manager’s first goal in a loss prevention program is to reduce or eliminate the chance of death or injury of people. Some losses can be attributed to workplace hazards such as poor layout of machines, inadequate lighting or ventilation poor maintenance practices or insufficient computer security, inadequate training or supervision or lack of attention to safety requirement. Hood loss control programs can be developed and implemented to deal with all these problems but it takes a strong commitment by management to reach desired goals.
Loss reduction, loss reduction reduce loss severity despite the best loss prevention efforts, some losses occurs loss reduction activities aim to minimize the impact if losses. An excellent example of a loss reduction device is the automatic fire sprinkler system. This system is not designed to prevent firer but rather to prevent the spread of fires (that is educe a fire severity) other example of loss reduction include fire walls and doors, instructions for treating people who have swallowed, poisons. When the severity of loss is great and when the loss cannot be avoided, loss reduction activities are appropriate.
CONCLUSION
These techniques can control risks through risks avoidance, loss prevention and loss reduction and some regulations are used to control loss such as occupational safety and Health Act of 1970 (OSHA). This federal law promotes a safe working environment for employees.
#prepared by Scolar a second year in law at Moshi cooperative university
