RISK MANAGEMENT Class 1

1. RISK MANAGEMENT Class 1 OBJECTIVES Define Risk and Risk Mgt. Risk Management Mission Operational Risk Management Considerations

2. What is Risk? • “Risk” as noun or verb • Noun; The possibility of meeting danger, exposure to harm or loss • Verb; to expose to a chance of injury • Noun; A person insured

3. What is Risk? • Determining Factors in Defining Risk • Probability • Harm • Severity

4. What is Risk? • Describing Risk • Probability of occurrence • Subjective like • One in a million • Rare, high, low • One in three, thirty percent

5. What is Risk? • Describing Risk • Harmful consequences • Descriptive like • Death • Injury • Destruction • Disaster

6. What is Risk? • Describing Risk • Probability and Consequence • Combined and expressed in math • 10 million value (consequence) • 2% loss probability

7. What is Risk? • Probability of Risk • Relates to; • The chance that something might happen • The outcome / negative consequence rated on a scale

8. What is Risk? • Assessing Risk • Probability and risk often guide our decisions personally and professionally • Each situation comes with some form of risk.

9. Three Levels of Risk • The community as a whole • The emergency response agency • Emergency response operations

10. Risk Management • Risk management • activity that involves • evaluation/comparison of risks • Development of approaches to change probability or consequence

11. Risk Management • Is the entire process of identification and evaluation of risks as well as the identification, selection, and implementation of control measures that might alter risk. • Administrative • Engineering • PPE

12. What is Risk? • Relative Risk • MI minor to fatal • Insurance risk • Item, person, object • Insurance premiums and probability • Type, size, value of structure • Contents, installed systems • Use, and FD resources

13. Control measures • Administrative • SOPs • Training (standards, requirements) • Safe work practice • Regulation, Standards, Enforcement • Goal make the task safe

14. Control Measures • Engineering • Apparatus design • Station layout • Co system • Tool design • Goal make the task safe

15. Control Measures • Personal Protection • Bunker gear • SCBA • P2 kits EMS • Ear protection • Goal make FF safe from hazards

16. RM in the Community • FD plays a critical role in RM and is part of the community RM plan • FD Chief responsibilities • Managing fire and associated risk • Provide FD part of RM system • Mission readiness

17. RM in the Community • Key FD support activities in RM • Fire prevention • Code enforcement • Pub ed (recognize, prevent, respond) • All these activities help reduce risk

18. Organizational RM • FD mission to manage outside Risk • Can’t fulfill mission without managing Risk within the FD • Like private sector we must protect ourselves (assets) • One BIG difference • FD is mission critical

19. Organizational RM • We hold the Public Trust • Fiduciary responsibility in its most critical application • Without police and FD society can easily disintegrate

20. Operational RM • The nature of FD function is inherently risky • Risk can be reduced by • Identification of risks • Evaluation of risks • Control strategies • Risk / Benefit everyone • NFPA 1500 later

21. Chapter 2 • Define risk and loss control • Introduce general RM principles • Overview 5 step RM process • RM and legal responsibility • Specific FD Risk Mgt concerns

22. Definitions and Concepts • Dictionary says risk is • The possibility of meeting danger or suffering harm or loss • A person or thing insured • To expose to the chance of injury or loss, to accept the risk of ….

23. Definitions and Concepts • NFPA 1500 says Risk is • A risk is a measure of the probability and severity of adverse effects, the adverse effects result from an exposure to some type of risk

24. Definitions and Concepts • Two dimensions of Risk probability • Occurrence and magnitude • Risk is also used to refer to undesirable consequence • Death /injury • Property loss / damage • Increased cost of operation / loss • Being OOS and inconvenience

25. Definitions and Concepts • “Management” suggests an organized and directed approach that implements evaluated techniques to control systems, events, and people. • Risk management implements a “proactive” rather than a “reactive” approach to problems or limiting risks. The term “risk management” refers to a systematic effort to identify, evaluate, and control risk to reduce both the probability that something might go wrong and the adverse effects if something does go wrong.

26. Definitions and Concepts • Exposure; action or non action that leads to a loss • RM incorporates a full range of measures to limit reduce or eliminate the consequence of an undesirable event

27. Definitions and Concepts • FD is inherently involved in risky situations that can cause injury or death to FD members or civilians • Other risks include • Apparatus, equipment, facilities • Risk management is highly important and very challenging for the FD

28. Definitions and Concepts • The FDs mission is to manage its internal risk as it performs its mission of managing the external community risk

29. Losses and Loss Control • Loss control Objective, • Limit consequences of risk • Personnel loses • Property losses • Down time OOS • Liability (criminal / civil) • Direct and indirect lost (cost)

30. Orgazitional RM System • FD Risk Management system • Functions • Components • Activities • All members involved in the system

31. Orgazitional RM System • No single method or solution to manage risk NFPA is a guide • Each FD must find solutions that are • Frequently reviewed / up graded • Properly managed • Continuously improved

32. Organizational RM System • A dynamic process with goals & objective that are • Clearly stated • Understood • Attainable • Measurable • Everyone involvement

33. Organizational RM System • Three fundamental steps • Identification of risk • Evaluation of probability and magnitude • Establishing control measures • Even with good control measures losses may occur and funding losses must be provided

34. Steps in RM System • Identify risk exposure • Evaluate risk potential • Ranking and prioritizing risks • Determining & implementing controls • Evaluating and revising

35. Steps in RM System #1 • Identifying risks in all activities • People, death, injury, health • Apparatus, accidents, errors • Facilities, fire, natural incidents • Equipment, theft, damage • Malicious acts in all the above risks

36. Steps in RM System #2 • Evaluating risk • What is our local experience? • What is the national experience? • What are probabilities? • What are probable consequences? • Likelihood and loss addressed together

37. Steps in RM System #3 • Generally risks with the most severe potential outcomes are considered to have priority over relatively minor risks And those most likely to occur have priority over the less likely

38. Steps in RM System #4 • Determine and implement controls • Factors in implementing controls • Predicted effect / results • Time for implementation / for results • Effort required • Costs associated / insurance • Expenses i.e. cost benefit • Any mandates

39. Steps in RM System #4 • Funding • Risk retention funding inside FD • Risk transfer funding outside FD • Cost / benefit analysis pg 42

40. Steps in RM System #4 • Three Control options • Risk avoidance • Not realistic in most cases • Risk reduction • Planning, training, maintenance • Risk transfer • Give risk to other organization

41. Steps in RM Systems #4 • Risk control categories • Administrative • Training, SOPs, enforcement • Engineering • Standards compliance • Personal protective controls • All PPE

42. Steps in RM System #5 • Evaluate and revise actions and techniques • What works • What doesn't work as intended • Continuous improvement

43. Legal Issues • A FD is legally responsible for acts or omissions causing unreasonable risks • Physical injury or death • Damage to property • Damage to environment • Negative economic impacts • Damage to individuals reputation

44. Legal Issues • Statutory immunity granted the FD because of its mission • Gives authority to decide risk benefit • But limited to scope of FD services

45. Legal Issues • Legal responsibility to manage risk to the FD members keeping in mind • FD has no control over emergency • Location • Work environment • Has no opportunity to correct hazards

46. Legal Issues • Property owners are protected against negligence because • Based on the assumption that • F/F are aware of risks • F/F knowingly accept them • Can be challenged if owner causes unreasonable risk

47. Legal Issues • Legal responsibility extends to risk management in regard to safety and health of firefighters • This responsibility is different (tactically) from the duty to protect the community

48. Legal Issues • Law gives immunity therefore great discressionary power to make necessary decisions during an emergency • It would be impossible to act during an emergency under constant legal threat • Be careful of gross negligence

49. Legal Issues • Risk mgt must consider • OSHA (IDOL) standards • Legal in nature • Consensus standards NFPA • Not technically legal but carry great weight

50. Legal Issues • Its difficult to determine RM effectiveness without looking at its application to specific situations • effectiveness is measured by documentation and Application • Documentation is essential • Written policy, procedures, SOPs, etc • Training, equipment, etc