Risk Management

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Risk Management

• It is a process
• Identification and Assessment
• Response Strategies (What do we do?)
• Mgmt to reduce freq severity (Oper. Plan)
• Types of Risk
• Risk of Financial Loss
• Risk of Injury

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Why Risk Management?

• Enhances Participant Experiences
• Safety should be a paramount goal!
• 85 of all accidents are preventable!
• Provides Good Stewardship of Assets
• Determines most cost effective strategies
• Forestalls Problems (ie legal actions)
• Better prepared if (when) sued
• Encourages Professional Practices

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STAGES IN RISK MANAGEMENT
IDENTIFICATION
Types Parties Hazards Tort
Agency Environmental Contract
Board Infrastructure Property
Employees Programmatic Business
Volunteers Emergency Human Rights
Transportation
ASSESSMENT
Probability Severity
Financial High Fatal
Catastrophic Medium Severe
Critical Low Major
Moderate Minor
Minimal Low
ADOPTION
Acceptance Evaluation Board Activity Direct
or Results Staff Volunteers
RISK RESPONSE STRATEGIES
Avoid Insurance Reduce Transfer Inspect Leas
ing Warn Contractors Remove Waivers Repair
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Step 1. Identification of Risks

• Legal Based Classes of Loss
• Property (human or nature caused)
• Financial business (accidents, embezzlement)
• Contractual (breach of contract)
• Tort liability ( negligence, etc.)
• Human Rights (harassment, discrimination)
• Types of Hazards
• Environmental, infrastructure, programmatic,
  emergency care and transportation

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Identification (cont.)

• Immunity
• When an entity is not liable for its acts
• Usually acts of ordinary negligence
• State Recreational use Statutes
• All states except N. Carolina
• Shared Responsibility Statutes
• Participant is liable for knowing how to engage
  in the activity

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More Identification

• Comparative Fault Statutes
• Participant is liable for that is their fault
• Most states, if 50 or more, agency not liable!
• Who is Liable for What?
• Board for collective acts of the board
• Employees for their own misconduct
• Volunteers Volunteer Protection Act

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Step 2. Assessment of Risks

• All Identified Risks Must be Assessed!
• For Probability/Frequency (high, med, low)
• Consequence Severity (Exhibit 16-4 16-5)
• Sources of Data to Base Assessment on
• Organizational Data document historically
• Incident and accident reports
• Staff Assessment use own judgment
• National/other data When a new activity
• May consult with an outside person

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Step 3. Risk Response Strategies

• There are three basic strategies
• Risk Avoidance
• not offering or discontinuing risky activities
• Risk Reduction (p. 725 reduction practices)
• Reducing the frequency and/or severity
• Risk Transfer
• Contractual transfer to a 3rd Party (they bear
  risk)
• Leasing, independent contractor or Liability
  waivers

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For a Waiver to be Valid

• Must be signed by an adult, voluntarily
• It must clearly state that it is for the
  negligence of provider
• Not merely accepting risks
• Participants must know it is a waiver
• Cannot be against public policy
• Cant release intentional or willful wanton acts
  or gross negligence

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Risk Financing Strategies

• Retention (paying from your budget)
• Current Expensing (paying as they arise)
• Unfunded reserves (keeping on books)
• No money set aside, but aware of possibility
• Funded reserves (money is set aside)
• Borrowing (either internally or externally)
• Self-insurance Joint Pooling (group insur)

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Risk Mgmt. Strategies (cont.)

• Transfer of Financial Risk to 3rd Party
• Contractual agreements releases
  indemnification agreements (settle)
• Can relate to the participant
• Usually from a signed waiver (rarely happens) or
• Can relate to an entity
• Ie user of facility releases provider of any
  losses
• Commercial insurance companies
• Liability insurance

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Step 4. Adoption Facilitation

• Implementing the Plan
• Dvlp a Policies Procedures Manual
• Part of the operational plan
• Performance must be Monitored
• Both the procedures and the results
• Risk Accounting (ie monitor costs)
• Review and Update the Plan