Guiding Principles of Risk Management
Avoid
Avoid identified loss by not owning a particular liability or choosing not to engage in a certain activity or walk away from a transaction or business opportunity if the risk level does not match your tolerance level.
Manage
Apply techniques to measure and eliminate the severity of a loss. Techniques for real estate often include direct remediation, deed restrictions, and engineering controls. Techniques for operating businesses can include loss control and training programs.
Retain
Pay for anticipated and unanticipated losses as they arise. The risk of a loss remains within the business, technology, or real property.
Transfer
Transfer the uncertainty of a loss away from an operating business, modern technology, or real property. Risk Transfer removes a level of potential risk from the business to a third party, such as an insurance company or a prior responsible party.
