Week 10 - Life, Health, and Income Exposures (please read all requiremnets)

Running Head: TERM PAPER DRAFT 1

Running Head: TERM PAPER DRAFT 3

Term Paper Draft

Eddie Feliciano

Rasmussen

Author Notes

This Term Paper is being submitted on August 30, 2013, for Eddie Feliciano B249/RMI2011

Risk Management and Insurance

Term Paper Draft

Knowing the level of risk as expected during a certain period of time can help prepare contingency plans to prevent or minimize such occurrences. It’s a critical aspect which is mainly analysed through risk assessment which seeks to quantify expected risk in several levels. Cabbage Patch Cookery is not an exception. From the expansion of operation the business may encounter various risks like.

Political risks- come about as a result of the following, Change in the political climate, change in legislation, lack of sufficient insight into the necessary permits required, health and safety, ignorance of the safety precaution. A country’s governance may affect the operations of an organisation. This is due to restrictions towards certain practices which are aimed at ensuring that the citizens are safe and there is ongoing development in most sectors. Political risk requires an organisation to obtain necessary permits, keep up to required safety standards, and obey laws and regulations in their areas of operations.

Social risks- may be internal or external. Internal risks arise from within the organisation, whereas external risks arise from outside the organisation. Some of the sources of social risks are; Damage as result of work performed on third party property, strikes and Lack of good communication with the community directly affected by the project output. These sources of risks arise from human activities that may be due to unintended consequences of activities undertaken or decisions made for other distinct purposes or they may come as a result of intentional harm such as fraud or terrorism.

Operational risks- are as a result of disorganised or inaccurate record keeping, out-dated or faulty IT systems, and interruptions to your supply chain. Mainly, disorganization will cause operational risks. A confused work environment without supervision and irresponsible personnel interfere with the operations of an organization. The management should ensure there is free flow of work, set backup procedures in-case of interruptions, and good record keeping for future references to eliminate operations fraud and lags.

Zoning risks- emerge from three major sources namely; Unusual climatic conditions, additional or heavier pollution or contamination of the location, lack of or insufficient estimate of compensating environmental measures. Outcomes from natural phenomena are risks only because they impact on the well-being of humans or on what is regarded as important to humanity. The above sources affect decisions made regarding lifestyles, cultural practices and beliefs.

In terms of insurance, insurers may refuse to insure some risks like zoning risks which will include natural catastrophes like earthquakes.