Risk Management

Abstract

Risk management is a relatively new term which is used to embrace the practice of identifying serious risks which may beset an organisation, deciding on their relative importance and advising the most advan-tageous ways of combatting them or mitigating their effects. At one time it was the practice to take out insurance to cover all serious eventualities, but because of the increasing cost of insurance cover many organisations now assess risks and the probability of their occurring, make an evaluation in each case of the probable loss that may be sustained, and then decide whether to insure or carry the risk themselves. A wrong judgement here, of course, could be disastrous.