Risk management and insurance - Assignment Example

They can also create awareness on their employees and other personnel in the organization to ensure that they conduct safety precautions to prevent fire outbreak in the organization. 10 It is important for any organization to have a risk management plan against any possible risks that may be harmful for their organization. That is why organization B decided to take action against its risk of fire outbreak in its premises. Its first alternative was to take an insurance cover from an insurance company.

However, the premiums for the coming years seems became so high that the organization decided to seek for an alternative course of action in risk management. The management is looking for a cost effective means of risk management that is effective yet at an affordable price. This paper is aimed at answering the main question that is: the alternative course of action that organization B should take to ensure that it manages its risk of fire effectively. The paper has thoroughly discussed an efficient process of decision-making that will enable the manager to choose an effective and efficient technique to manage the possible risk.

The paper has discussed various alternatives to insurance policy. It also focuses on the process of selecting effective techniques of risk management. It is important that the organization conducts an analysis and comes up with the most effective technique to minimize its risks incurred. That is why this paper has conducted a thorough description and analyses of all the possible courses of action for the organization to ensure that it makes the best choices to prevent incurring losses. It ends with a conclusion that sums up the whole paper.

There are four alternative courses of action that the organization can take: risk retention, risk sharing, risk avoidance, and loss control. Risk avoidance requires the