Risk Assessment and Treatment
Work for hire
A term that applies to two exceptions to the copyright ownership rule: works created in the course of the author's employment and works created on commission.
Trademark
A trademark is a device used to distinguish a product from its competition
Implementation of Risk Management for Reputational Risk
1. identify, evaluate, and prioritize reputational risks 2. develop and implement risk responses 3. monitor and report
disposal phase
The disposal phase (or termination phase) is the final phase of a system's life cycle. Its importance has been driven largely by environmental concerns.
Risk Analysis
Risk analysis entails investigating the identified risks to make decisions regarding whether risk treatment is needed and which techniques should be used.
Risk Analysis
Risk analysis entails investigating the identified risks to make decisions regarding whether risk treatment is needed and which techniques should be used. Risk analysis considers the causes and sources of risk, as well as positive and negative impacts and the likelihood of those impacts.
Risk Appetite
Risk appetite is the total exposed amount that an organization wishes to undertake on the basis of risk-return trade-offs for one or more desired and expected outcomes
Risk appetite
Risk appetite is the total exposed amount that an organization wishes to undertake on the basis of risk-return trade-offs for one or more desired and expected outcomes.
Risk Assessment
Risk assessment includes risk identification and risk analysis. As part of risk identification, the risk management professional should consider the causes and sources of risk.
Design Patent
ornamental features of a patent (14 years from date of issuance)
Seven Steps of Business Continuity Planning
1. understanding the business 2. conducting a business impact analysis (BIA) 3. performing a risk assessment 4. developing the continuity plan 5. implementing the continuity plan 6. building a BCM / BCP culture 7. maintaining and updating the plan
Top-Down Assessments
Top-down assessments involve senior management and/or the organization's board of directors and focus on strategic issues that could affect the organization's ability to meet objectives. Such assessments identify major risks that affect the entire organization.
Trade Secret
a practice, method, process, design, or other information used confidentially by an organization to maintain a competitive advantage. Protection applies if the information was improperly disclosed to or acquired by a competitor and if the owner took reasonable precautions to keep it secret.
System Safety
a safety engineering technique also used as an approach to accident causation that considers the mutual effects of the interelated elements of a system on one another through a systems life cycle.
Supply Chain
a system of organizations, people, activities, information, and resources involved in providing, moving and delivering a product or service from supplier to customer
Arbitrary mark
a word or phrase that appears to have been used randomly ex. Hush Puppy
Fanciful mark
a word or phrase that conjures up an image that is imaginative. ex. pillow walker
Suggestive mark
implies certain product qualities ex. bit-no-more insect repellent
Premises and operations liability loss exposure
includes bodily injury or property damage claims arising out of the use of mobile equipment
Trademark
legal right granted by a governmental entity to an organization to exclusively own and control a distinctive design or set of words that legally identifies a product or service as belonging to that organization. The intent of a trademark is to create a distinction of the products or services that the organization provides in the minds of its customers.
Contracts
legally enforceable agreements between two or more parties
Copyright Duration
life of author + 70 years (everything made after Jan 1st, 1978) work for hire (95 years from publication or 120 years from creation whichever is shorter)
Four Trademark Categories
listed in decreasing order of the extent to which they provide protection from infringement by competitors: - Arbitrary mark - Fanciful mark - Suggestive mark - Descriptive mark
Two basic causes of loss are associated with workplace injuries and illnesses:
physical and procedural
Production phase
purchasing the vehicles selected in the conceptual and engineering phases
Inherent Vice
refers to a condition that can cause property to deteriorate or destroy itself
Business judgment rule
A legal rule that provides that a director will not be personally liable for a decision involving business judgment, provided the director made an informed decision and acted in good faith.
General Damages
A monetary award to compensate a victim for losses, such as pain and suffering, that does not involve specific, measurable expenses.
Punitive Damages
A payment awarded by a court to punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct; the award need not bear any relation to a party's actual damages
Compensatory damages
A payment awarded by a court to reimburse a victim for actual harm.
personal inspections
A personal inspection is a valuable method to help determine the extent of workplace hazards. Risk management professionals can use personal inspections to identify workplace hazards that may lead to the death, disability, or voluntary separation of employees who were not identified by the other methods of assessing personnel loss exposures.
Production phase
A phase in the life of a system when the actual system is created.
Conceptual phase
A phase in the life of a system when the basic purpose and preliminary design of the system are formulated.
Operational phase
A phase in the life of a system when the system is implemented.
Engineering phase
A phase in the life of a system when the system's design is constructed and prototypes are tested.
Criticality
A product of the risk priority number elements of consequence and occurrence used to determine the relative risk of a failure mode and effects analysis item.
Separation
A risk control technique that isolates loss exposures from one another to minimize the adverse effect of a single loss.
Loss prevention
A risk control technique that reduces the frequency of a particular loss.
Loss reduction
A risk control technique that reduces the severity of a particular loss.
Diversification
A risk control technique that spreads loss exposures over numerous projects, products, markets, or regions.
Duplication
A risk control technique that uses backups, spares, or copies of critical property, information, or capabilities and keeps them in reserve.
Risk managers role in fleets
A risk management professional works to prevent a system failure and is aware of its consequences throughout related systems.
Risk Map
A risk map, also referred to as a risk matrix, can be used to evaluate risk analysis results. One event may result in multiple types of impact, and each variation must be evaluated.
Pure Risk
A risk that presents the chance of loss but no opportunity for gain
Root cause analysis
A systematic procedure that uses the results of the other analysis techniques to identify the predominant cause of the accident.
These are the methods risk managers use to assess personnel loss exposures:
Risk assessment questionnaires Loss histories Other records and documents Flowcharts and organizational charts Personal inspections Expertise within and beyond the organization
Local effect
The consequence of a failure mode on the operation, function, or status of the specific item or system level under analysis.
Functional replacement cost
The cost of replacing damaged property with similar property that performs the same function but might not be identical to the damaged property.
Replacement cost
The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation.
Fiduciary duty
The duty to act in the best interests of another.
Emergency Stage
The emergency stage, sometimes referred to as disaster recovery, starts at the moment of disruption and constitutes the organization's immediate response.
Purpose
The essential purpose of any fleet system is to transport cargo or persons
Root cause
The event or circumstance that directly leads to an occurrence.
Safe and Well Maintained
The fleet incurs few, if any, vehicle accident losses that might increase the transport time because of vehicle repair or maintenance.
Lawful
The fleet operates within the legal requirements of applicable local, state, and federal laws regarding issues such as size and weight restrictions.
Environmentally Neutral
The fleet's operation does not pollute or otherwise harm the environment in ways that could impose common law or statutory liability on the fleet operator or owner.
Reliable
The fleet, with a high degree of certainty, completes all trips as scheduled without harm to the freight or passengers.
Flow chart method
The flowchart method identifies employees at critical junctions in an organization's activities. Each function or operating division should be charted, analyzed, and examined to determine how heavily it relies on key persons at various operational steps.
Goal of Risk Treatment
The goal of risk treatment is to modify identified risks to assist the organization in meeting its objectives.
Goal of risk treatment
The goal of risk treatment is to modify identified risks to assist the organization in meeting its objectives.
Goals of Risk Assessment
The goals of risk assessment are to inform management at all levels of the risks facing an organization and how those risks affect the organization's ability to meet objectives, as well as to identify potential risk treatment options
Goals of risk assessment
The goals of risk assessment are to inform management at all levels of the risks facing an organization and how those risks affect the organization's ability to meet objectives, as well as to identify potential risk treatment options.
Laches
The legal term for waiting too long to assert a legal right.
Failure mode
The manner in which a perceived or actual defect in an item, process, or design occurs.
Notice
The notice takes the form of the symbol ©, followed by the year in which the work was published and the name of the copyright owner. Once this notice is placed on a published work, any party that copies the work without permission cannot claim lack of knowledge of the copyright, which makes it easier for the copyright owner to collect damages.
Active Backup Model
The organization establishes a second site that includes all of the necessary production equipment housed at the primary site. Staff may be relocated to the second site if operations are disrupted at the primary site.
organizational chart
The organizational chart method of identifying personnel loss exposures involves studying job descriptions to identify the most important positions. This method highlights key persons who exercise unique talents, creativity, or special skills; make decisions vital to the organization; or manage and motivate the acts of others.
Historical cost
The original cost of a property.
Bailor
The owner of the personal property in a bailment.
Bailee
The party temporarily possessing the personal property in a bailment.
Plant Patent
The patent that protects the invention or discovery of asexually reproduced varieties of plants for 20 years. (17 years from date of issuance)
Market value
The price at which a particular piece of property could be sold on the open market by an unrelated buyer and seller.
Intellectual property
The product of human intelligence that has economic value.
Risk priority number (RPN)
The product of rankings for consequence, occurrence, and detection used to identify critical failure modes when assessing risk within a design or process.
Communication Stage
The sole objective of the communication stage is to preserve or enhance stakeholders' trust and confidence in the organization
Effects analysis
The study of a failure's consequences to determine a risk event's root cause(s).
Disparate impact
(also called discrimination by effect or adverse impact) is the application of personnel policies to all applicants or employees that have the effect of denying employment or advancement to members of protected classes. For example, requiring that all employees be more than five feet, ten inches tall will have a disparate impact because many more men than women exceed that height. Such a requirement eliminates more women than men from the pool of eligible employees. Unless the requirement is necessary for performance of the job, it is a violation of the law.
Book value (net depreciated value)
An asset's historical cost minus accumulated depreciation.
Speculative Risk
A chance of loss, no loss, or gain.
Quantitative Methods
Quantitative assessments are objective and based on numerical data and calculations
Efficient
The fleet operates at an acceptable cost.
Descriptive mark
describes the product ex. luxury limo service
Cascading Disruption
seemingly unrelated events that can cause major disruptions
Engineering phase
selecting the types of vehicles, operators, routes, roads, schedules, and maintenance that best meet the organization's fleet needs
Settlement negotiations
settlement negotiations might offer opportunities to resolve the suit more favorably than would the court.
Business resiliency planning
the development of plans that prepare the organization to respond to disruptions
Supply chain management
the development of sound relationships and diversity among suppliers
Copyright
the legal right granted by a governmental entity to a person or organization for a period of years to exclusively own and control an original written document, piece of music, software, or other form of expression. It is the most prevalent type of intellectual property protection. However, copyright laws do not protect the ideas and underlying concepts of an expressive work. Such laws only protect the literal form that the expressive work takes.
Patent
the legal right granted by a governmental entity to an inventor or applicant for a limited period to exclusively own and control a new, useful, and nonobvious invention
human cause of loss
the maintenance department did not perform the proper maintenance on the manufacturer's production line
Comity
the practice by which one country recognizes, within its own territory or in its courts, another country's institutions. Comity can also apply to the rights and privileges acquired by a citizen in a country. Many experts believe that comity is the basis for all private international law.
Residual Risk
the risk that remains after management implements internal controls or some other response to risk
Civil Law
uses comprehensive codes and statutes to form the backbone of a legal system. This system relies heavily on legal scholars to develop and interpret the law. In the civil-law system, a judge is a civil servant whose function is to find the correct legislative provision within a written code of statutes and apply it to the facts presented in a case. Judges perform little interpretation of a code, and their opinions do not determine their thought processes on legal issues.
Three types of patents
utility, design, plant
Enterprise assessment
a global assessment of risks that could affect the enterprise's overall business goals
Overt discrimination
(also called intentional discrimination) is a specific, observable action that discriminates against a person or class of persons. An example of overt discrimination is refusal to interview job applicants of a certain race.
Milieu /Mother Nature
(environment)—Local conditions, such as temperature, time, location, or culture, within which a process operates
Manpower
(inspection)—Data generated from a process used to judge the quality of the product
Method
(process)—Requirements that specify how a process is performed (for example, policies, procedures, rules, regulations, and so forth)
Machine
(technology)—Any equipment or technology involved in completing a job, such as computers, tools, or other machinery
Directors and officers are considered to have met their duty f care if they meet these standards
- Act in good faith and in a manner they reasonably believe to be in the corporation's best interests - Discharge their responsibilities with informed judgment and a degree of care that a person in a similar position would believe to be reasonable under similar circumstances
BCP Strategies
- Active Backup Model - Split Operations Model - Alternative Site Model - Contingency Model
Risk control for directors and officers liability loss exposure
- Adhering to the requirements of the Sarbanes-Oxley Public Company Reform and Investor Protection Act of 2002 (Sarbanes-Oxley) - Establishing the independence of a corporation's board of directors - Providing opportunities that encourage open, clear, and concise communication among directors and officers - Ensuring that directors and officers fully understand the organization's operations, corporate charter and bylaws, and securities and antitrust laws
Assumptions of Fault Tree Analysis
- All components exist in only one of two conditions—success or failure (operational or not operational) - Any system component's failure is independent of any other component's failure. - Each failure has an unchanging probability of occurrence. Moreover, to keep fault tree analysis manageable, many fault trees limit the number of potential causes of failure they examine, perhaps overlooking other causes. However, despite this simplified approach, fault tree analysis can aid in evaluating a harmful event.
TOR five basic principles of risk control
- An unsafe act, an unsafe condition, and an accident are all symptoms of something wrong in the management system. - Certain circumstances, unless identified and controlled, will produce severe injuries. - Safety should be managed like any other organizational function, with management setting achievable goals and planning, organizing, leading, and controlling to achieve them. - Management must specify procedures for accountability if safety efforts are to be effective. - The function of safety is to locate and define the operational errors that allow accidents to occur.
Steps in Driver Selection
- Analyzing job functions—determining what specific tasks drivers will perform - Recruiting applicants—advertising, prescreening, and reviewing applications - Screening applicants—interviewing and administering written and road tests - Hiring employees—making the initial job offer (subject to checks and a physical exam), conducting background checks, conducting a physical examination, and confirming the job offer - Orienting employees—conducting new-employee orientations and establishing and maintaining qualification files
Risk Treatment Techniques
- Avoid the Risk - Modify the likelihood/impact of risk - Transfer the risk - Retain the risk - Exploit the risk
BCP Three Levels of Planning
- BCM organizational strategy - BCM process level strategy - BCM resources recovery strategy
Major types of employment practices claims
- Discrimination claims - Wrongful termination claims - Sexual harassment claims - Retaliation claims - Other types of EPL claims
Organizations can take actions such as these to reduce the frequency and severity of potential EPL claims:
- Establish hiring practices that comply with standards set forth by federal, state, and local regulations and laws. - Word employee handbooks clearly and concisely to document the company's policies and procedures, including employment-at-will status. - Provide all employees with a formal policy regarding sexual harassment and discrimination, and document their receipt. Review the policy and update it as needed. - Permanently post and distribute all EEOC documents, as well as state and local compliance documents. - Conduct employee performance reviews at least annually, and initiate interim reviews to correct unacceptable behavior. - Follow a carefully documented termination procedure, and exercise special care when handling terminations. - Conduct exit interviews and carefully document them. - Promptly investigate all allegations of harassment or discrimination.
Valuation Methods for Intellectual Property
- fair market value approach - income approach - cost approach
Major responsibilities and duties of directors and officers
- Establishing the corporation's basic goals and broad policies - Electing or appointing the corporate officers, advising them, approving their actions, and auditing their performance - Safeguarding and approving changes in the corporation's assets - Approving important financial matters and ensuring that proper annual and interim reports are given to stockholders - Delegating special powers to others to sign contracts, open bank accounts, sign checks, issue stock, obtain loans, and conduct any activities that may require board approval - Maintaining, revising, and enforcing the corporate charter and bylaws - Perpetuating a competent board by conducting regular elections and filling interim vacancies with qualified persons -Fulfilling their fiduciary duties to the corporation and its stockholders
Types of Cause and Effect Analysis
- Hazard and Operability Studies (HAZOP) - Fault Tree Analysis - Failure Mode and Effects Analysis
Supply chain risk analysis steps
- IDENTIFY the exposures and types of risk for each company independently - DETERMINE the co-dependencies between each company - ANALYZE the exposures and determine how each company can avoid or mitigate losses to their exposures
Five Steps of a Fault Tree Analysis
- Identify a specific harmful event to construct the fault tree. Be as specific as possible so that events contributing to the failure can be fully described. -Diagram, in reverse order, the events that led to the harmful event. - Determine whether the events leading to any other event on the fault tree are connected by an "and" gate or by an "or" gate. - Evaluate the fault tree to determine possible system improvement. - Make suggestions to management about risk control measures that can treat the hazards identified in the fault tree.
Limitations of Fault Tree Analysis
- If a high degree of certainty does not exist concerning the probabilities of the underlying or base events, the probability of the top event may also be uncertain. - Important pathways to the top event might not be explored if all causal events are not included in the fault tree. - Because a fault tree is static, it may need to be reconstructed in the future if circumstances or procedures change. - Human error is difficult to characterize in a fault tree. - "Domino effects" or conditional failures are not easily included in a fault tree.
FMEA's primary goal is to ensure customer safety and production of quality products through these outputs:
- Improvement in the design of procedures and processes - Minimization or elimination of design characteristics that contribute to failure - Development of system requirements that reduce the likelihood of failures - Identification of human error modes and their effects - Development of systems to track and manage potential future design problems
Disadvantages of the 5 Whys
- Investigators tend to stop the analysis after the first determination rather than asking additional questions to discover a problem's root cause. - Investigators tend to focus on only one answer to each question. - Organizations sometimes do not help the investigator ask the right why questions. - An uninformed investigator cannot ask relevant questions. - Different investigators will discover different causes for the same problem. (This can be an advantage if several root causes exist for the same problem.)
Advantages of FMEA
- It is widely applicable to many different system modes. - When used early in the design phase, it can reduce costly equipment modifications. - It can improve the quality, reliability, and safety of a product or process, as well as improve an organization's image and competitiveness by possibly reducing scrap in production. -It emphasizes problem prevention by identifying problems early in the process and eliminating potential failure modes.
Major categories of commercial liability loss exposure
- Premises and operations liability - Products and completed operations liability - Automobile liability - Workers compensation and employers liability - Management liability - Professional liability - Environmental liability - Marine liability - Aircraft liability - Cyber liability
Common allegations made against directors and officers in a non derivative suit
- Providing false or inadequate disclosure in connection with stock issuance - Making or permitting false entries in the corporate books and records - Preparing and signing false documents filed with regulatory authorities - Failing to correct inaccurate statements within a prospectus issued by the corporation - Failing to review annual financial statements and monitor corporate affairs - Missing an opportunity for expansion, acquisition, or sale of the corporation
Risk identification and analysis techniques may include these:
- Questionnaires and checklists - Workshops - Cause-and-effect analysis - Failure analysis - Future states analysis - Strategy analysis - Emerging technologies and smart products
Types of Root Cause Analysis
- Safety-based RCA originated from accident analysis and occupational safety and health. - Production-based RCA evolved from quality control procedures for industrial manufacturing. -Process-based RCA is similar to production-based RCA, but it also includes business processes. - Failure-based RCA stems from failure analysis and is used primarily in engineering and maintenance. - Systems-based RCA combines these four approaches with change management, risk management, and systems analysis concepts.
Accident Analysis Techniques
- Sequence of events (domino theory) - Energy transfer theory - The technique of operations review (TOR) approach - Change analysis - Job safety analysis
Safety Technology for Fleet Operations
- Stability control systems sense when a vehicle is traveling too fast in a curve and automatically apply the vehicle's brakes. - Rear-mounted video cameras provide the operator with a better vision of what is happening behind the vehicle. - Antilock braking systems prevent a vehicle's brakes from locking up and perpetuating a loss of traction during a skid. - Satellite communication with global positioning system (GPS) capabilities allows an employer to monitor a vehicle's position and progress en route and enables a driver to stay on course and reduce the likelihood of unexpected risks encountered on an unplanned route - Lane departure warning systems (LDWS) are collision warning systems that alert drivers when they have crossed into another lane to avoid sideswipe collisions or head-on collisions and when they have crossed onto a shoulder or off the roadway to avoid collisions with fixed objects and rollover accidents.
Public international law
A law that concerns the interrelation of nation states and that is governed by treaties and other international agreements.
Steps creating a fishbone diagram
- Team agrees on a problem statement. - Facilitator writes statement on the far-right-hand side of the diagram, draws a box or circle around it, and draws a horizontal arrow across the center of the page that points to the statement. - Team brainstorms the major categories of causes of the problem. These categories will depend upon the type and structure of the organization and system under question. - Facilitator depicts the categories of causes as branches emanating from the main arrow. The categories may be common to the industry or specific to the organization. - Team members brainstorm possible specific causes of the problem, using techniques such as the 5 Whys analysis. - Facilitator writes each specific cause as a branch from the appropriate category. Causes can be assigned to any category to which they relate. - For each of the specific causes listed in the previous step, the team again asks, "Why did this happen?" The facilitator writes the sub-causes as branches from the causes. The team continues to ask why to generate deeper levels of causes. As the layers of branches are drawn on the diagram, causal relationships are revealed. -Before moving to the final step, the team should focus on areas of the diagram with the fewest ideas. - Once the team has determined the root cause(s), remedies are developed and implemented to prevent recurrence of the problem described in the original statement.
To prevail in a claim of hostile work environment, an employee generally must prove all of these facts:
- The employee is a member of a protected class. - The employee was subjected to unwelcome harassment based on the protected characteristic. - The harassment affected a term or condition of employment. - The employer knew or should have known about the harassment and failed to take prompt remedial action.
Three criteria for copyright creation
- The work must be original. It cannot be copied from another source. - The work must be fixed in a tangible medium of expression that is permanently recorded. This could be in any manner of forms, such as paper, videotape or audiotape, or digital media. - The work must have some degree of creativity. No set rule governs what constitutes enough creativity.
External exposures/ vulnerabilities
- Third-party suppliers - Sole source suppliers - Change in demand level - Financial risks - Geopolitical environment - Natural catastrophes - merger of a key supplier with a competitor
Exceptions to copyright ownership
- When the work was created in the course of the author's employment. In that case, the copyright is owned by the employer. - When the work was created on commission. If the author acted as an independent contractor when creating the work under a written agreement with the commissioning party, the copyright is then owned by the commissioning party. - When the author sells the copyright.
Disadvantages of FMEA
- When used as a top-down tool, FMEA may only identify major failure modes in a system. - Other analysis methods might be better suited for this type of analysis. When used as a bottom-up tool, it can complement other methods, such as fault tree analysis (FTA), and identify more failure modes resulting in top-level symptoms. - Analyzing complex multilayered systems can be difficult and tedious with FMEA, and studies that are not adequately controlled and focused can be time-consuming and costly.
In any legal dispute arising between parties from different countries, these two issues must be considered:
- Whether a court in one country will recognize the decision of another country's court - Whether a court has the right to hear the legal dispute
Prevalent personnel causes of loss include these:
- Work-related injury and illness - Retirement and resignation - Work-related violence
Root cause has four basic characteristics
- a root cause is expressed as a specific underlying cause, not as a generalisation - a root cause can be reasonably identified - a root cause must be expressed as something that can be modified - a root cause must produce effective recommendations for prevention of future accidents that stem from the root cause
Requirements for Enforceability of Contract
- agreement - consideration - capacity to contract - legal purpose
Strategic choices for addressing a disruption of operations include these options
- an insurance policy - transfer processing - termination - loss mitigation - do nothing
Factors to consider in Vehicle Selection
- anticipated cargo (size/weight) - characteristics of cargo - number of passengers - geographic area of operation
Risk treatment for work related injury and illness
- avoidance - loss prevention - loss reduction - separation and duplication
Advantages of the 5 Whys analysis
- can determine the root cause of a problem -when several root causes are found it can help determine the relationship among them - does not require statistical analysis or data collection
Features of trademarks
- categories - creation - duration
A motor vehicle fleet has four common factors
- components - purpose - environment - life cycle
All systems have these four features
- components - purpose - environment - life cycle
Steps in the root cause analysis process
- data collection - causal factor charting - root cause identification - recommendation determination and implementation
Modifying the consequences of tort liability
- development of defenses - settlement negotiations
Responses to anticipated defenses
- education, journalism etc. - too much time has passed - innocent defense i.e. did not know
Remedies should include
- eliminating the failure mode - minimizing the severity / consequences - reducing the occurrence - improving detection
Four stages of SRP
- emergency stage - alternate stage - contingency stage - communication stage
Workplace design includes
- ergonomics - human factors engineering - biomechanics
Modifying the likelihood of statutory liability
- experts - trade associations - legal libraries - corporate code of conduct
Key Drivers of Reputation and Sources of Risk
- financial performance and long term investment value - corporate governance and leadership - corporate social responsibility - workplace talent and culture - deliver on customer promises - regulatory and legal compliance - communications and crisis management
Five widely used defenses
- legal privilege - immunity - comparative negligence - last clear chance doctrine - assumption of risk
Illness causes of loss
- long term chemical exposures - noise levels - ergonomic stress - radiation - temperature extremes - poor air quality
Utility Patent
- machine - article of manufacturing - chemical compound - process or method (20 years from application date)
6 Ms of the Fishbone Diagram
- machine - method - materials - manpower - measurement - milieu / mother nature
Injury cause of loss
- machinery and equipment use - materials handling - vehicle fleet operations - physical conditions of premises
Loss prevention physical controls
- material substitution - isolation - wet methods - guarding - ventilation - maintenance - house keeping - PPE
Reasons for valuing intellectual property
- mergers and acquisitions - generate revenue with its intellectual property by selling it or licensing its use - can be a source of collateral - recovering adequate damages in the event of third-party infringement - intellectual property's accounting and taxation treatment differs from other types of assets - determining the amount of risk management resources that should be devoted to it
Consequences of legal and regulatory risk to an organization
- monetary damages - defense costs - indirect losses - specific performance or injunction
Three categories of wrongful act that constitute torts
- negligence - intentional torts - strict liability torts
Risk Control Measures for Patent Loss Exposures
- notice - licensing agreement - restrictive covenants -freedom to operate search
Risk control measures for copyright loss
- notice - registration - restrictive covenants - response to anticipated defenses - licensing agreements
Risk Control Measures for Trademark Loss Exposures
- notice - registration - searches and watches - licensing agreements - restrictive covenants - enforcement of rights
Harmful events generally are associated with one of three basic causes of loss
- physical - human - organizational
Most important environments in which a fleet operates
- physical - legal - economic - competitive
Driver alcohol testing can be performed for these reasons
- pre-employment - random - reasonable cause - post-accident - return-to-duty - follow-up
Loss prevention procedural controls
- process change - education and training - standard operating procedures - proper supervision - medical controls - job rotation
Threats and opportunities inherent in supply chains
- production location - production bottlenecks - information technology - infrastructure - strikes or other employment issues - machinery breakdown
Emergency Stage Three Objectives
- protect people - protect physical assets - protect reputation *he emergency stage may include closing and cleaning the facility, recalling products, and meeting with employees and news media to communicate the status f the emergency response
An organizations fleet system should have these characteristics
- reliable - safe and well maintained - efficient - environmentally neutral - lawful
Successfully managing risk to reputation requires an understanding of these important concepts
- reputation as a key asset - key risk sources - systemic approach to managing reputation risk - implementation of risk management for reputation risk
Potential negative aspects of legal and regulatory risk can be treated in these ways
- risk avoidance - modifying the likelihood of an event - modifying the consequences of an event *risk- transfer can also be appropriate at times
Communication stage four basic concerns
- safety and security of all stakeholders - transparency in all of management's decisions - clarity and consistency in all communications - perceived lack of trust in management and the organization
Modifying the consequences of contractual liability
- select a favourable jurisdiction - include limits of liability - include a liquidated damages provision - include a valuation clause - evaluate duty to mitigate
Trademark Creation
- the mark must be distinctive - the trademark's owner must be the first to use the trademark
The Essential Triangle
- the organization - its message - stakeholder expectations
Modifying the likelihood of an event
- torts - contracts -statutes
What makes a trademark "distinctive"?
- unique symbol or logo - fabricated word (ex. Wal-mart) - Word that is unexpected in the context it is used - Word that creates a fanciful image - Word that describes a product's qualities *trademarks with a secondary meaning (ex. McDonald's)
Modifying the Likelihood of Contractual Liability
- using lawyers - having written contracts rather than oral contracts
A fleet system includes these components
- vehicles - vehicle maintenance - operators - cargoes - routes - vehicle schedules
Modifying the likelihood of tort liability
- waivers - hold-harmless agreements - exculpatory agreements - unilateral notices
Domino theory chain of accident factors
1. Ancestry and social environment 2. Fault of person 3. An unsafe act and/or a mechanical or physical hazard 4. The accident itself 5. The resulting injury domino theory is well-suited to accidents caused by human carelessness.
Private international law
A law that involves disputes between individuals or corporations in different countries.
The plaintiff must prove three elements
1. The product was defective when it left the manufacturer's or supplier's custody or control. 2. The defective condition made the product unreasonably dangerous. 3. The defective product was the proximate cause of the plaintiff's injury.
Steps in 5 Whys Analysis
1. The specific problem under investigation is described completely. (This helps to formalize the problem.) 2. The investigator asks why that particular problem occurred and determines the answer. 3. If the answer does not reveal the problem's root cause, the investigator determines why the problem embodied by the determination made in Step 2 occurred. 4. The investigator repeats the previous two steps until the root cause of the original problem has been determined.
Identifying key personnel involves answering two questions:
1. What would the organization do if this person suddenly were not available? 2. If this person were unavailable, could the organization achieve its fundamental goals?
Five phases in the life cycle of any system
1. conceptual 2. engineering 3. production 4. operational 5. disposal
An organization's fleet has a five phase lifecycle
1. conceptual phase 2. engineering phase 3. production phase 4. operational phase 5. disposal phase
Causal Factors
The agents that directly result in one event causing another.
Monte Carlo Simulation
A Monte Carlo simulation uses random variables, such as gross domestic product and competitor price levels, to simulate a range of outcomes—for example, levels of product demand. It is based on a random sampling of the variables. This technique is used to evaluate risks arising from a broad scope of situations. The computer model samples the random variables hundreds or thousands of times to produce a distribution of various outcomes. Based on several risk assessment decisions, the Monte Carlo technique uses statistical analysis to calculate possible outcomes and the probability of each.
Tort
A civil wrong, The remedy for a tort is usually monetary damages. An organization is liable for any tort it commits through its agents, which can include employees; subordinates; associates; directors and officers; anyone using the organization's property with its permission; and anyone, including volunteers in some situations, acting on the organization's behalf.
class action suit
A class action (or class action lawsuit) is a lawsuit in which one person or a small group of people represents the interests of an entire class of people in litigation. Many class actions against directors and officers are based on wrongful acts related to securities
Comparative negligence
A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault.
Unenforceable contract
A contract that is a valid contract but that because of a technical defect cannot be enforced.
Valid contract
A contract that meets all of the requirements to be enforceable.
Voidable contract
A contract that one of the parties can reject (avoid) based on some circumstance surrounding its execution.
Bailment contract
A contract that requires the bailee to keep the property in safekeeping for a specific purpose and then to return the property to the bailor when the purpose has been fulfilled.
Express contract
A contract whose terms and intentions are explicitly stated.
Implied contract
A contract whose terms and intentions are indicated by the actions of the parties to the contract and the surrounding circumstances.
Injunction
A court-ordered equitable remedy requiring a party to act or refrain from acting.
Specific performance
A court-ordered equitable remedy requiring a party to perform a certain act, often—but not always—as a result of breach of a contract.
Secured creditor
A creditor who has a right to reclaim property for which a loan was extended.
Modifying the consequences of statutory liability
A defense commonly pled by organizations in these cases is that the statute was unconstitutional or was too vague or ambiguous to be enforceable. If the statute has already been tested on this defense and upheld by a higher court, it will likely not be effective.
Immunity
A defense that, in certain instances, shields organizations or persons from liability.
Last clear chance doctrine
A defense to negligence that holds the party who has the last clear chance to avoid harm and fails to do so solely responsible for the harm.
Derivative Suits
A derivative suit is a lawsuit brought by one or more shareholders in the name of the corporation. Any damages recovered go directly to the corporation, not to the plaintiff-stockholder(s).
Special damages
A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages.
Trademark Duration
A trademark that has been entered on the USPTO Principal Register is protected for ten years (or twenty years if registered before November 16, 1989). The registration can last indefinitely, provided it is renewed every ten years. Trademark protection can continue indefinitely without registration. However, it is considerably more difficult to defend.
Servicemark
A way that an organization can differentiate its services from those of its competitors.
Strategy Analysis
A widely used strategy analysis technique is a SWOT (strengths, weaknesses, opportunities, and threats) analysis. This analysis starts with an internal evaluation of the organization's strengths and weaknesses and is followed by an evaluation of the opportunities and threats in the external environment.
Recommendation determination and implementation
After a root cause has been identified, attainable recommendations for preventing its recurrence are then generated. It is important to implement these attainable recommendations for two reasons. First, if they are not implemented, the effort necessary to perform the RCA process has been wasted. Second, the event(s) that caused the RCA to be performed is likely to occur again. The recommendations determined by the RCA process should be tracked to completion.
Domino theory
An accident causation theory that presumes that accidents are the end result of a chain of accident factors.
Ultra vires
An act of a corporation that exceeds its chartered powers.
Void contract
An agreement that, despite the parties' intentions, never reaches contract status and is therefore not legally enforceable or binding.
Job safety analysis (JSA)
An analysis that dissects a repetitive task, whether performed by a person or machine, to determine potential hazards if each action is not performed.
Criticality analysis
An analysis that identifies the critical components of a system and ranks the severity of losing each component.
Change Analysis
An analysis that projects the effects a given system change is likely to have on an existing system.
Failure mode and effects analysis (FMEA)
An analysis that reverses the direction of reasoning in fault tree analysis by starting with causes and branching out to consequences.
Fault tree analysis (FTA)
An analysis that takes a particular system failure and traces the events leading to the system failure backwards in time.
Energy transfer theory
An approach to accident causation that views accidents as energy that is released and that affects objects, including living things, in amounts or at rates that the objects cannot tolerate.
Technique of operations review (TOR)
An approach to accident causation that views the cause of accidents to be a result of management's shortcomings.
Workers compensation and employers liability loss exposure
An employer's responsibility to pay claims under workers compensation statutes is a common example of liability imposed by statute.
Illness
An illness usually develops more slowly as the result of some organic or inorganic agent being absorbed, ingested, inhaled, or injected that impairs a function of a body.
Reputation
An intangible asset, a key determinant of future business prospects, resulting from a collection of perceptions and opinions, past and present, about an organization that resides in the consciousness of its stakeholders.
HAZOP technique
An intensive, time-consuming process used to solve complex problems. It uses a team of specialists from different operational areas to study a process or procedure and examine how failures may result in a hazard. An important feature is the use of guide words that are appropriate for the process under consideration. For example, the terms "more" and "less" could be chosen to identify deviations that are higher or lower than expectations. The team studies the process and provides documentation of its results. This documentation includes specific plans for treating the risks identified in the study.
Indenture level
An item's relative complexity within an assembly, system, or function.
Systemic approach to managing reputation risk
An organization is a dynamic combination of interactions among the organization itself, its message, and its stakeholders' expectations, known as "The Essential Triangle." Reputation can be either enhanced or damaged as a consequence of these interactions.
Why do organizations conduct risk assessments
An organization performs a risk assessment to identify and evaluate potential exposures and the probability that certain events will occur.
Alternative Site Model
An organization that uses this strategy maintains a production site and an active backup site that functions as the primary site as needed.
Loss exposure
Any condition or situation that presents a possibility of loss, whether or not an actual loss occurs.
Liability loss
Any loss that a person or an organization sustains as a result of a claim or suit against that person or organization by someone seeking damages or some other remedy permitted by law.
Cost Approach
Assigns a value to a piece of intellectual property based on the amount the organization invested in its creation and development. This method assumes that no other entity would pay more for the intellectual property than it would cost to create it.
Fair market value approach
Assigns to a piece of intellectual property the value it would have on the open market were it to change hands between a willing buyer and a willing seller. (most formal)
Conceptual phase
At the conceptual phase, the more that hazards are managed or designed out of the system, the less the system will need to rely on protective equipment and special procedures in the operational phase to reduce the chances of human error.
Auto No-Fault Laws
Automobile liability is legal responsibility for bodily injury or property damage arising out of the ownership, maintenance, or use of automobiles.
Automobile Liability Loss Exposure
Automobile liability is legal responsibility for bodily injury or property damage arising out of the ownership, maintenance, or use of automobiles.
Loss Control Techniques for Hazard Risks
Avoidance Loss prevention Loss reduction Separation, duplication, and diversification
Economic value
The amount that property is worth based on the ability of the property to produce income.
Bottom-Up Assessments
Bottom-up assessments are conducted at the business level and are more operational in nature.
Production phase
Because the production phase (or developmental phase) involves creating the system according to the dimensions, specifications, and procedures determined in a prior phase, most of the system safety opportunities occur in other phases.
Risk retention
Because unplanned retention of unidentified risks can result in catastrophic loss to an organization, risk retention should be used for risks that have been identified and analyzed so that the organization clearly understands the risks that are being retained. Organizations may also actively take or increase their risk to exploit an opportunity.
Bottom-up risk assessments
Bottom-up assessments are conducted at the business level and are more operational in nature. For example, a division manager may identify risks that affect the ability to meet day-to-day objectives—such as employee injuries or interruptions to operations—and analyze their significance. The results of these approaches must be integrated to provide a comprehensive risk assessment.
Four Categories of failure in a criticality analysis
Category 1—failure resulting in excessive unscheduled maintenance Category 2—failure resulting in delay or loss of operational availability Category 3—failure resulting in potential mission failure Category 4—failure resulting in potential loss of life
Cause-and-effect analysis
Cause-and-effect analysis identifies the possible causes of an event or problem. This technique uses a formal approach to examine all possible causes and subcauses of a given issue. The analysis uses a template that graphically illustrates all the causes and their effects. Such analysis is most often used when trying to determine the root cause of a problem or to examine interrelations within a specific process that produce an unintended result. Two approaches to cause-and-effect analysis include the fishbone diagram and the 5 Whys technique.
Completed Operations Liability
Completed operations liability is the legal responsibility of a contractor, repairer, or other entity for bodily injury or property damage arising out of the entity's completed work.
Types of FMEA
Concept—used in the early design stages to analyze systems or subsystems Design—used to analyze products prior to production Process—used in manufacturing and assembly processes Equipment—used to analyze machinery and equipment design before purchase Service—used in service industry processes before release to determine impact on customers System—used in global system functions Software—used for software functions
Risk Priority Number Components
Consequence rankings (C)—rate the severity of the effect of the failure Occurrence rankings (O)—rate the likelihood that the failure will occur (failure rate) Detection rankings (D)—rate the likelihood that the failure will not be detected before it reaches the customer *The rankings for consequence, occurrence, and detection are usually on a one-to-five or one-to-ten scale, depending on the criteria for the organization and process. The highest number on the scale is assigned to the most severe, most likely to occur, or hardest to detect events.
Registration
Copyright owners gain several benefits from registering their work. First, registration provides reasonable, if not indisputable, evidence of ownership rights. Second, registration allows the copyright owner to collect statutory damages (up to $100,000 plus attorneys' fees) without having to prove actual monetary harm.
Emerging Technologies and Smart Products
Emerging technologies and smart products and operations can provide real-time, dynamic risk identification and assessment. These technologies and smart products and operations enable organizations to discover risk scenarios, infer critical risk insights, and quickly respond to the risks they have identified and assessed.
Failure mode and effects analysis
FMEA examines the components within a system or process to identify possible modes of failure and how each affects the system or processes. This technique can also analyze the probability and potential severity of failures.
Failure Mode and Effects Analysis
FMEA examines the components within a system or process to identify possible modes of failure and how each affects the system or processes. This technique can also analyze the probability and potential severity of failures. FMEA can be used to improve processes at the design stage and to identify the effect of human error within the system. FMEA uses a team approach to examine the process and identify potential failure modes at each step. Every element of the process is analyzed to determine where failures might occur and to identify the consequences of these failures. Where failure points are identified, the design should be modified to compensate for failures. FMEA produces qualitative output and is used for problems of moderate complexity. The team could extend the process to categorize failure modes based on their criticality. Criticality analysis is generally accomplished by assigning a risk priority number. In this case, the process is called failure mode, effects, and criticality analysis.
Failure analysis
Failure analysis techniques focus on identifying the causes of failure to prevent recurrences - Hazard and operability studies (HAZOP) - Fault tree analysis (FTA) - Failure mode and effects analysis (FMEA)
Flow charts and organizational charts
Flowcharts and organizational charts present risk management professionals with two methods that help identify key persons and key points in an organization's processes.
modifying likelihood/impact
For hazard risks, modifying the likelihood of events focuses on loss prevention efforts to reduce overall loss frequency. Techniques designed to modify the impact of events recognize that not all negative outcomes can be avoided, but that the financial consequences of these events can be decreased.
Future states analysis
Future states analysis techniques seek to determine what risks may develop in the future.
Future States Analysis
Future states analysis techniques seek to determine what risks may develop in the future. Scenario analysis is used to examine how the current environment may be influenced by emerging developments, such as new technology or new competitors in the market.
Where is HAZOP used?
HAZOP is often used in manufacturing and processing operations to examine the process and identify potential hazards that could result in direct physical damage, injury to employees, or other failures.
Types of Risk
Hazard Risk Strategic Risk Operational Risk Financial Risk
Hazard Control
Hazard control involves implementing risk control measures that eliminate or reduce hazards. A key aspect of risk control for tort liability is hazard control for the risk exposures covered under an insurance policy, such as premises and operations, products, and completed operations.
Do nothing
If an organization does nothing in the event of a disruption of operations, it absorbs the potential loss. This represents an increase of its risk appetite.
Common Law
In the common-law legal system, a judge interprets the facts of a case, examines precedents (prior judicial rulings in similar cases), and makes a decision based on the facts in the current case. Precedents are guides, not rigid frameworks for all decisions. This system tends to be fact-intensive, relying on the judge's reasoning for a final decision.
Engineering phase
In the engineering phase, the system progresses, and a prototype is created. The precise dimensions, specifications, and procedures are tested for full-scale use. Safety design features, such as machine guards or a fire detection/suppression system, also become integral parts of the system during this phase.
operational phase
In the operational phase (or deployment phase), when the system is fully functional, safety features built into the system during the earlier phases must be maintained. For example, fire detection/suppression systems must be supervised, fire doors must remain closed, and periodic fire drills must be conducted to keep personnel trained in emergency procedures. Opportunities for adding safety options in the operational phase are not as numerous (or are much more costly) as in the earlier phases. These opportunities are more limited because the system's basic features have already been implemented and are therefore harder to change.
Restrictive Covenants
In this context, a restrictive covenant is any provision, clause, or agreement that, on termination of employment or contract, restricts the post-termination activities of the employee or contracting party.
Split Operations Model
In this model, an organization maintains two or more active sites that are geographically dispersed. Capacity at each site is sufficient to handle total output in the event of a disruption at either site.
Materials
Information, parts, pens, paper, raw materials, and so forth used to produce the final product (consumables)
Injuries
Injuries are usually caused by an external physical force exerting stress on the human body, resulting in some externally manifested injury.
Legal and regulatory risk
Legal and regulatory risk is categorized as hazard risk arising from liability risk exposures.
Products and completed operations liability loss exposure
Liability for products and liability for completed operations are often treated as components of one loss exposure. However, products liability and completed operations liability each have distinguishing characteristics.
Loss histories
Loss histories are a source of internal information about the causes of personnel losses.
The duties of a plan fiduciary are comparable to those of a corporate director:
Loyalty—A fiduciary's actions must be solely in the best interests of the plan and all of its participants and beneficiaries. Prudence—A fiduciary must carry out his or her duties with the care, skill, prudence, and diligence of a prudent person familiar with such matters. ERISA spells out the "prudent person" rule: a fiduciary must act with the care, diligence, and skill that would be exercised by a reasonably prudent person in the same or similar circumstances. For instance, a fiduciary who undertakes activities requiring specialized skills, such as investment of plan assets, will be held to the standard of care applicable to professional persons who perform such activities. Diversification—A fiduciary must ensure that the plan's investments are sufficiently diversified to minimize the risk of large losses. Adherence—A fiduciary must act according to the plan documents and applicable law. If the plan document is not in compliance with the law, the fiduciaries must follow the law and bring the plan document into compliance.
Root cause identification
Mapping or flowcharting can help determine the underlying reason(s) for each causal factor identified in step two.
Non derivative suits
Nonderivative suits against directors and officers are not made in the name of the corporation. Customers, competitors, employees, creditors, governmental entities, or other persons outside the corporation may initiate such suits. Stockholders who suffer harm may also bring nonderivative suits in their own names as opposed to suing in the corporation's name.
Fleet Technology and Risk Management
Organizations can use advanced technology in fleet safety to minimize accident potential and liability. Because operator error is a significant cause of motor vehicle accidents, being able to monitor and control inappropriate behaviours is a crucial risk control measure. Many advanced safety technologies are available to help reduce the frequency and severity of accidents.
Disposal phase
Phase in the life of a system when the system reaches the end of its useful life and is disposed of.
Post-lost measures
Post-loss measures typically focus on emergency procedures, salvage operations, rehabilitation activities, or legal defenses to halt the spread or to counter the effects of loss. For example, erecting firewalls to limit damage from a fire is a pre-loss measure; activating a fire detection/suppression system is a post-loss measure.
Pre-loss measures
Pre-loss measures to reduce loss severity can also reduce loss frequency (for example, driving ambulances at lower speeds in nonemergency situations). Pre-loss measures generally reduce the amount of property damage or the number of people suffering loss from a single event.
Products liability
Products liability arises out of the manufacture, distribution, or sale of an unsafe, dangerous, or defective product and the failure of the manufacturer, distributor, or retailer to meet its legal duties to the user or consumer of the product.
Qualitative Methods
Qualitative methods, such as surveys or interviews, are more subjective and subject to interpretation
Risk identification and analysis techniques may include these:
Questionnaires and checklists Workshops Cause-and-effect analysis Failure analysis Future states analysis Strategy analysis Emerging technologies and smart products
Risk Assessment
Risk assessment is a process designed to identify and analyze the risks that face an organization. These risks can have a positive or negative effect on the organization's ability to meet objectives. The results of risk assessments form the basis of an organization's risk response and treatment decisions.
Risk Identification
Risk identification involves reviewing all aspects of the internal and external environments to identify events that could either improve or inhibit the organization's achievement of objectives. As part of risk identification, all risk sources and risk exposures should be examined to determine the potential financial consequences. For each risk that is identified, possible controls should be considered for mitigation purposes.
Residual risk
Risk remaining after actions to alter the risk's likelihood or impact.
Risk Tolerance
Risk tolerance is the amount of uncertainty an organization is prepared to accept in total or, more narrowly, within a certain business unit or particular risk category, or for a specific initiative
risk tolerance
Risk tolerance is the amount of uncertainty an organization is prepared to accept in total or, more narrowly, within a certain business unit or particular risk category, or for a specific initiative
Risk transfer
Risks can be transferred, or shared, through contractual arrangements or joint ventures with other organizations. Outsourcing is a method of risk sharing that can be used to transfer noncritical operations and their related risks to another organization. For hazard risks, insurance is the primary technique used to transfer risk. Contractual risk transfers (noninsurance), such as hedging or other contractual agreements, can be used to transfer financial consequences of risks to another party or organization.
Statutes
Statutes are created by federal, state, provincial, or territorial governments and often modify the duties owed to others.
End effect
The consequence of a failure mode on the operation, function, or status of the highest indenture level.
Next-higher-level effect
The consequence of a failure mode on the operation, function, or status of the items in the indenture level immediately above the indenture level under analysis.
Strict Liability Torts
Strict liability does not require negligence or intent to harm. Strict liability torts typically arise when an organization engages in certain activities that are considered ultrahazardous or that involve product liability cases. Examples of ultrahazardous activities are blasting, harboring wild or dangerous animals, or manufacturing or selling certain hazardous products.
Supply Chain Risk Management
Supply chain risk management entails assessing and mitigating all the threats that might interrupt the normal flow of goods and services from and to an organization's stakeholders.
Delphi technique
The Delphi technique is a form of brainstorming that relies on a panel of experts to reach a consensus opinion on an issue. A team is formed to select the panel and monitor the process. The team sends the experts a semistructured questionnaire, which the experts respond to anonymously. The team then collates the panel's responses and sends a summary report to the panel. This process is continued until a consensus opinion is reached. The advantages of this approach include a wider range of opinions, gained because of respondents' anonymity, and the ability to use widely dispersed experts because the panel does not meet in person. A possible disadvantage is that the process can be time-consuming.
Fault Tree Analysis
The FTA technique identifies a specific event, referred to as the top event, and then analyzes factors that contribute to it.
Fault Tree Analysis
The FTA technique identifies a specific event, referred to as the top event, and then analyzes factors that contribute to it. The construction of the fault tree includes symbols that graphically represent the logical progression of causal factors from the top event. FTA provides a means to systematically examine problems.
Recovery Time Objective
The time period within which a critical process must be recovered in order for the organization to resume operations after a disruption of operations
Trade dress
The total image of a product or service that allows the product or service to be distinguished from its competition in the marketplace.
Infringement
The unauthorized use of an individual's intellectual property.
Gross Vehicle Weight Rating
The value specified by the manufacturer as the loaded weight of a single vehicle.
Hold Harmless Agreements
These are contractual provisions by which one party (the indemnitor) agrees to assume the liability of a second party (the indemnitee). Hold-harmless agreements are commonly found in leases that require tenants to hold landlords harmless from claims made by third parties who are injured by the tenants' negligence. Construction contracts also contain hold-harmless agreements.
An insurance policy
This allows the organization to recover some of its financial losses if it suffers an insurable loss.
Loss mitigation
This entails implementation of risk controls and plans to reduce, minimize, or divert any loss.
Transfer Processing
This entails the organization's entering reciprocal arrangements with another company or division to perform a necessary function in the event of a disruption of operations.
Contingency Model
This strategy involves the organization's developing an alternate way to maintain production, perhaps using manual processes.
Calculating RPN
To calculate the RPN, the rankings for consequences, occurrences, and detection are multiplied. The resulting product is then compared with RPNs associated with other failures. The failure associated with the highest RPN usually is addressed first. *As a general rule, any RPN with a high C-value should be given top priority
Top-down Risk assessments
Top-down assessments involve senior management and/or the organization's board of directors and focus on strategic issues that could affect the organization's ability to meet objectives. Such assessments identify major risks that affect the entire organization.
Termination
With this strategy, an organization ceases production of the affected product or service.
Work place design
Workplace design coordinates a work environment's physical features, devices, and working conditions with the capabilities of the people in that environment.
These are two prevalent types of work-related violence:
Workplace violence—Workplace violence includes any type of violence or threat of violence that occurs in the work environment, including physical and verbal assaults, threats, coercion, and intimidation. Kidnap and ransom—Kidnap and ransom is a loss exposure that organizations are likely to face if they operate in a high-risk overseas location that is not subject to the kinds of security measures used in the United States.
Strategic Redeployment Plan
a comprehensive plan for resiliency after a severe disruption. it is designed to bring the organization back from a state of chaos.
Organizational causes of loss
faulty systems, processes, or policies (such as procedures that do not make it clear which maintenance employee is responsible for checking and maintaining the manufacturer's production line)
Disparate treatment
also called unequal or differential treatment) is unfavorable or unfair treatment of someone in comparison to how similar individuals are treated. Disparate treatment occurs, for example, if female employees are regularly reprimanded for returning late from lunch but male employees who also return late are not.
licensing agreement
an agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties
Site assessment
an assessment by risk owners at risk centers of risks associated with particular sites or locations or even specific geographies
Program or project assessments
an assessment of a project's capabilities, resources, and limitations in relationship to a viable recovery strategy
Income Approach
assigns a current value to a piece of intellectual property based on the discounted cash flows the property would generate over its useful life. The income approach is the most effective approach for risk management purposes because its formula can incorporate a number of risk factors. (most prevalent)
Speculative risks
can have both negative and positiveconsequences
Conceptual phase
determining what types of motor vehicles (as opposed to other modes of transportation) will meet an organization's needs
Directors' and officers' fiduciary duties include
duty of care, the duty of loyalty, the duty of disclosure, and the duty of obedience.
Disposal phase
eliminating old vehicles unable to legally fulfill the purposes and attributes of the fleet because of age, technological obsolescence, or other reasons, and replacing those vehicles with vehicles that better fulfill the organization's transportation needs
Mitigation plan
establish strategies in advance of a disruption, are an important part of any business continuity plan.
Physical cause
failure of a tangible or material item, such as a vital part on a manufacturer's production line breaking
Premises and operations liability loss exposure
relates to liability arising from bodily injury or property damage caused either by an accident that occurs on an organization's owned, leased, or rented premises or by an accident that arises out of the organization's ongoing (as opposed to completed) operations but occurs away from the premises. An organization's liability for such accidents is usually based on negligence—that is, the organization's failure to exercise the appropriate degree of care owed to some person under the circumstances.
System safety
safety engineering technique also used as an approach to accident causation that considers the mutual effects of the interrelated elements of a system on one another throughout the system's life cycle.
Operational phase
using the vehicles selected to transport freight or passengers over the selected routes on a predetermined schedule and maintaining the vehicles so that they can operate reliably, safely, efficiently, and lawfully, while being environmentally neutral
