Chapter 2 Risk Management

Risk Management Process of determining the circumstances in which losses are most likely to occur, and then designing and implementing policies and procedures to minimize the likelihood of their occurrence We also must realize that that no matter how careful we are, some losses will still occur. Some of these reasons are uncontrollable performance errors, the effects of weather, equipment breakdowns, etc. Must try minimize the impact of those losses that cannot be prevented

Why Risk Management Injury prevention in sports is the most focused area in risk management Other areas that need to be addressed are equipment breakdown, facility damage, and possible civil and criminal lawsuits against staff. Risk management allows maximal benefits of these programs while minimizing the risks of physical injury to the participants and financial loss to the organization

Why Risk Management Most risk management programs are designed to provide one or more of the following special benefits Careful planning allows program administrators to maximize the number and variety of programs Helps make dangerous activities safer Can help protect financial stability of organization allowing operating costs to be easily predicted Minimizes breakdown of equipment allowing longer lifespan and time lost due to broken equipment By minimizing injuries and bad press and word of mouth, can maintain participant satisfaction and support The moral responsibility someone feels toward the people they’re working with. We don’t work in our fields to hurt people Encourages the active involvement of all staff members creating a better more balance program

Risk management planning A well designed plan should include An analysis of the services and activities offered. An assesment for the potential for loss Pratcical approaches to deal with the loss potential The plan must be made for each specific organization The plan, no matter how well made, must be reviewed and modified

Components of the plan The first task is to perform a risk analysis to find areas find potential human and economic losses This means looking at the objectives, limitations of the facilities and equipment involved, nature, skill levels, number of participants, supervisory structure, and the duration of the program for each activity This data is then compared to the applicable professional standards. If there is a problems lawyers are going to measure your activity to established standards

Components of the plan Statutes and codes There are several sources that can be used to find the best and current professional standards for the avtivity Rules of the sport If the activity is an athletic event then there are rules that govenrn the sport. These rules include the conduct of the activity, officiating, playing area, equipment and saftey related issues Most playing rules have case books that give guidelines for difficult situations Professional associations Many professional associations provide guidelines and standards for activities in their areas. These are not binding but are usually brought to court to support or defend negligence claims Statutes and codes Look at the federal, state and local laws that effect athletics and recreational programs There are many laws that need to be looked at and could include requirments for building occupancy, fire and seftey details, teacher or coach certification, swimming pool operations etc.

Components of the plan 4. Case analysis and court decisions By watching the news and professional literature you can see what injuries and area of negligence are commonly involved You can use this to examine how you are handling similar siuations 5. Common Practice This is how others are handling the same problem or activity you are looking at. Seek help from other well respected programs to see how the are handling the same activities Can you see a pattern of practice emergging

Components of the plan http://www.youtube.com/watch?v=732rmkuFC7o Next step is to estimate the potential extent of the identifiable losses in terms of the following parameters Frequency How many losses are likely to occur in a given season, or fiscal year Can be estimated from programs history or from organizations such as the national safety council Severity How serious are the potential losses likely to be. As the risk increases for each activity the importance and nature of the risk management approaches will be affected Predictability A program that has been around for a while and has maintained good records will be easier to predict than one that is new and comparing stats of like programs http://www.youtube.com/watch?v=732rmkuFC7o

Alternative Control Approaches The simplest method is elimination of the activity. This is silly to eliminate everything but there are times here the program must be eliminated. There are very few programs that with proper planning can be safely utilized Program and operational controls are best accomplished trough the development and implementation of policies and procedures Policies are statements used by upper management to define the limits of the powers and responsibilities of their subordinates Procedures are detailed instructions of the plan on how to deal with certain situations Transfer is the economic approach to risk management which decreases the risk potential for financial loss Can use the following to try and stop financial loss Self insurance where they set money aside in case of a problem Current expensing using either insurance deductibles or aggregate deductibles.