Risk Management

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Chapter 8

• Risk Management

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Risk Management

• Risk management is described as reducing
  liability and loss through a planned program of
• -Education
• -Prevention
• -Control
• -Evaluation

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Benefits of Risk Management

• It is significantly less expensive to manage a
  risk prior to an occurrence than after a crisis
  has occurred
• Protects the financial well-being of the
  organization
• Reduces loss of time, materials, personnel and
  participants
• Maintains participant safety, satisfaction and
  loyalty

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Benefits of Risk Management

• Upholds moral principles of service orientation
• Creates a safer work environment
• Encourages active involvement of all staff
  members
• Expenditures associated with loss can usually be
  reduced, allowing the event managers to allocate
  savings to other areas that may increase the
  value of event-related experiences

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Risk-Management Strategies

• Understanding and identifying the risks
  associated with each type of resource utilized in
  an event can provide a systematic and practical
  means of mitigating the greatest number of
  possible occasions for loss
• Risk-management practices result in
• Fewer accidents
• Increased productivity
• Higher morale and favorable attitudes among all
  stakeholders

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Liability and Loss

• Lack of planning, poor communication, lack of
  technical knowledge or skills, false assumptions,
  carelessness, and a lack of attention to detail
  are frequently mentioned as contributing to a
  loss occurrence
• Omissionnot doing something that should have
  been done
• Commissiondoing something that should not have
  been done

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Underlying Mechanisms in Risk Management

• Identify all risksi.e., weather, accident and
  injury, technology, mismanagement
• Assess risk occurrences
• Assign value to each potential occurrence
• Develop data systems to record and monitor all
  risk occurrences
• Develop education and training program for
  employees, volunteers, and participants
• Develop the risk-management plan and process,
  including reports, emergency response procedures,
  standards for performance and reporting, and
  process-evaluation materials

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Education

• A suitable educational program should be
  developed by identifying the most typical types
  of problems that might arise
• Understand event parameters design an
  educational strategy to address these issues
• Research reduces risk share findings with those
  involved with the event in an appropriate and
  effective manner

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Event Risks

• Health, safety, and food-quality issues
• Unexpected weather occurrences
• Accidents and injuries
• Structural failures
• Technology failures
• Contractual difficulties
• Negative publicity
• Impact of competition

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Event Risks

• Theft
• Vandalism
• Fraud
• Sexual harassment
• Misuse of facilities
• Civil disturbances and the potential for
  violence
• Perception of problems associated with these
  issues that may lead to a crisis

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Event Parameters

• Projected attendance figures
• Demographics of anticipated attendees
• Risks inherent in the type of activities being
  offered at the event
• Probability of occurrence of particular types of
  incidences
• All impact the process of identification,
  prioritization, and education about risk

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Standards and Codes

• Food-handling regulations
• Sanitation codes
• Building and construction codes
• Electrical codes
• Traffic codes
• Other regulations that have been developed to
  improve safety

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Education and Training of Staff and Volunteers

• Includes certification training to qualify for a
  particular set of responsibilities - first aid
  provider, emergency medical service responder,
  food handler, traffic control, lifeguard, and
  other specific, certifiable programs
• Others will require in-house training
• All staff and volunteers should be trained as
  risk managers - all are aware of and actively
  involved in the process of risk management

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Education and Training of Staff and Volunteers

• Staff and volunteers must be taught to be
  proactive, to take immediate and appropriate
  action at the first sign of a potential risk
  situation
• General training should include visitors so that
  all stakeholders are conscious of the need to be
  personally responsible for themselves and for the
  well-being of others

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Local Safety Officials

• Provide staff and volunteers with the most
  up-to-date information and training open the
  lines of communication between your event workers
  and public safety professionals
• Early contact and familiarity with safety
  officials may prove to be instrumental should a
  crisis arise during an event that requires
  collaborative efforts between your staff and
  outside help

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Education and Training of Guests

• Invited guests to the event, defined as those
  that pay an admission price or are actively
  recruited and welcomed to the property, create
  the greatest potential for accident, injury and
  associated loss
• Onsite communication including focused efforts at
  informing participants of potential risks
  associated with the event is critical in reducing
  the occurrence of loss

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Prevention

• Reduce the frequency and severity of risk events
• Risk Matrix Occurrence and Severity
• Low frequency/Low severity
• Low frequency/High severity
• High frequency/Low severity
• High frequency/High severity

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Prevention

• Prevention also requires record keeping
• Past records are a key to understanding possible
  future risk
• Creating a master chart depicting all known risk
  factors and their occurrence and severity is an
  important step in preventing loss

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Prevention Strategies

• Four major preventative actions can be taken
  based on the frequency and severity of a
  particular risk
• Eliminate the risk entirely
• Reduce the risk significantly
• Assume the risk partially or totally
• Transfer the risk to insurers or participants

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Control

• Feedback through accident reporting, data
  collection, and analysis helps the event
  organizer to control risk in the future
• Establish loss prevention goals on an annual
  basis
• Identify additional training needs
• Schedule training opportunities early in the
  event cycle

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Evaluation

• All accidents and incidents should be documented
  using standardized reports completed by
  appropriate members of the event team
• Corrective actions taken during the course of the
  event should also be noted so that these changes
  will be incorporated into subsequent
  risk-management plans

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Evaluation

• Training of staff and volunteers regarding risks
  should also be evaluated through surveys of those
  receiving the training and the examination of all
  actions taken by staff members during the event
• Final analysis of the safety and risk management
  of the event should be solicited from the local
  service providers including police, safety,
  traffic, and health officials
• Evaluation must be properly documented and
  combined with an implementation strategy

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Liability and the Law

• Event organizers assume several responsibilities
  in relation to their guests
• The responsibility to provide adequate
  supervision
• The responsibility to provide appropriate and
  well-conducted activities
• The responsibility to provide safe and
  appropriate environmental conditions

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Liability and the Law

• Liability is closely related to the idea of
  responsibility in that liability means the level
  of obligation that one party owes another
• Someone is liable if they are responsible to
  another due to the relationship that has been
  established with the other party

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Liability and the Law

• Event organizers have a responsibility to those
  who attend the event and those who involve
  themselves in the event in other ways such as
  volunteers, supporters, and employees
• The event organizers may fail to do something
  that they should have done (omission) or may do
  something that they should not have done
  (commission)

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Negligence

• Negligence can be described as failing to conform
  to acceptable standards of care resulting in some
  form of injury to another party if such behavior
  is determined to be the proximate cause for the
  injury
• Loss, damage or harm is characterized as
• economic loss
• physical pain or suffering
• emotional distress
• physical impairment

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Prudent Person

• The measure of negligence is sometimes equated to
  what is called the prudent person standard
• Prudence means using good judgment, being wise
  and sensible
• Prudent professional standards suggests that
  individuals and groups who offer events to the
  public are expected to have professional training
  and judgment beyond that of the average prudent
  person

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Forseeability

• Prudence includes the idea of forseeability,
  suggesting that a prudent person would anticipate
  certain situations that may cause harm to others
• Exercise foresight in creating a safe,
  well-supervised environment for the guests
• Forseeability is greatly aided by the experience
  level of the event coordinators