RISK MANAGEMENT AND

INSURANCE

BY CARL RODNEY L.
TINDUGAN
(BSCE 3C)
 The engineer manager is entrusted with the
function of making profits for the company.
This will happen if losses brought by improper
management of risks are avoided.
Risk is a very important concept that the
engineer manager must be familiar with.
Companies that could not cope with losses
are forced to shut down , according to reports.
Fortunately, the engineer manager is not
entirely helpless. He can use sound risk
management practices to avoid the threat of
bunkruptcy due to losses.

RISK MANAGEMENT AND

INSURANCE
 Uncertainty concerning loss or injury. The
engineering firm is faced with a long list of
exposure to risks, some of which areas follows:
1. Fire
2. Theft
3. Floods
4. Accidents
5. Bad debts
6. Disability and death
7. Damage claim from other parties

RISK DEFINED
Pure
• "There is only a chance of loss."
• No way of making gains with
• Insurable
Speculative
• There is a chance of either loss or gain
• Not insurable

TYPES
 Risk management is "an organized strategy
for protecting and conserving assets and
people." Its purpose is "to choose intelligently
from among all the available methods of
dealing with risk in order to secure the
economic survival of the firm."
It's designed to deal with pure risks, while
the application of sound management
practices are directed towards speculative
risks that are inherent and can't be avoided.

WHAT IS RISK MANAGEMENT

They are as follows:
1. The risk may be avoided
2. The risk may be retained- the company
assumes the risk and pay losses out of
currently available funds
3. The hazard may be reduced- instituting
appropriate measures during business
activities
4. The losses may be reduced
5. The risk may be shifted- the company buys
insurance or practices hedging

METHODS OF DEALING
WITH RISK
When losses occur in spite of preventive measures, the
severity of loss may be limited by reducing the exposures.
Examples of efforts on loss reduction are as follows:
1. Physically separating buildings to minimize losses in case of fire.
2. Using fireproof materials on interior building construction.
3. Storing inventory in several locations to minimize losses in case of
fire and theft.
4. Maintaining duplicate records to reduce accounts receivable
losses.
5. Transporting goods in separate vehicles instead of concen-trating
high values in single shipments.
6. Prohibiting key employees from travelling together.
7. Limiting legal liability by forming several separate corporations.
l FIRE
l MARINE
l CASUALTY
l ENGINEERING
l AVIATION
l BONDS

INSURANCE PRODUCTS SOLD BY

A COMPANY
#I<3EngineeringM
anagement
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S@p@T Nah
THE END