Risk is the very broad chance of loss occurrence arising out of the uncertainty in certain actions/situations. Not only is this concept applicable to people in themselves, such as personal, property, and other losses, but businesses as well. Businesses must seek to truly grasp and appreciate the liabilities that they may face due to the hazards and perils of their operations/ business factors and mitigate these. Risk management is the practice of understanding and controlling for the problems that a company/business can face through its normal and continual practices. Sushi Niichi has various areas in which it must manage its risk to operate effectively and safely. One major risk involves that of liability risk: the losses arising out of
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It is critical to truly understand all of the uncertainty that arises out of Sushi Niichi’s day to day operations because those are the activities that create the most uncertainty and occur the most often. After understanding the risks that this company faces throughout its operations and premises, we must then proceed to look at the different methods that can be adopted to handle these risks such that they do not stop the processes of the company and allow services to …show more content…
There are two types of retention: active and passive. Active retention is the practice of consciously accepting a loss of money to the company because it would ultimately be less of a loss for the business for a variety of reasons. Passive retention is the opposite; Deliberate retention is not present, and often, a company discovers after the fact that it has absorbed. The company has not accounted for this risk, and ultimately faces problems because this loss of money is unknown until it is too late to reduce the loss severity.
Loss Control- Loss control is the practice of risk management that involves focusing on loss severity and frequency. Loss severity is the amount of loss in a certain situation and loss frequency is how often this loss may occur. Loss severity is a huge focus of businesses simply because a large enough loss has the ability to bring all business activities to a halt, possibly even ending the company itself. Loss frequency must also be monitored to ensure that losses do not occur often, even if there are small amounts of loss. Prevention and reduction must be employed in an organization for loss
It is critical to truly understand all of the uncertainty that arises out of Sushi Niichi’s day to day operations because those are the activities that create the most uncertainty and occur the most often. After understanding the risks that this company faces throughout its operations and premises, we must then proceed to look at the different methods that can be adopted to handle these risks such that they do not stop the processes of the company and allow services to …show more content…
There are two types of retention: active and passive. Active retention is the practice of consciously accepting a loss of money to the company because it would ultimately be less of a loss for the business for a variety of reasons. Passive retention is the opposite; Deliberate retention is not present, and often, a company discovers after the fact that it has absorbed. The company has not accounted for this risk, and ultimately faces problems because this loss of money is unknown until it is too late to reduce the loss severity.
Loss Control- Loss control is the practice of risk management that involves focusing on loss severity and frequency. Loss severity is the amount of loss in a certain situation and loss frequency is how often this loss may occur. Loss severity is a huge focus of businesses simply because a large enough loss has the ability to bring all business activities to a halt, possibly even ending the company itself. Loss frequency must also be monitored to ensure that losses do not occur often, even if there are small amounts of loss. Prevention and reduction must be employed in an organization for loss