Comprehensive business risk management is a multi-step process that varies according to the needs and requirements of each individual organization. the four basic techniques available to the risk manager for dealing with the pure risks facing the firm. ;
Clearly, one of the easiest ways to mitigate risk is to stop activities that could jeopardize your business. However, it's important to remember that you don't venture into anything and you get nothing. As such, this is often not a viable option for many companies.
The second risk management technique is mitigation. Basically, take the necessary steps to minimize the risk of an incident. Risk mitigation strategies should be weighed against the potential return on investment. If the cost of risk mitigation exceeds the potential cost of the incident, you must decide if it is really worth it.
One of the best ways to manage risk is to transfer it to another party. One example is the conclusion of comprehensive corporate insurance. Risk transfer is a pragmatic approach to risk management because it accepts that incidents do happen from time to time while ensuring that the organization is prepared to deal with the consequences of that unforeseen event.
Ultimately, taking risks means living out the effects of the event in anger, so to speak. This option is often chosen by individuals who believe the costs of transferring or reducing risk are excessive or unnecessary. Risk acceptance is a risky strategy because it risks underestimating potential losses and is particularly vulnerable in the event of an incident.
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