These are some of those risks that could occur and cause total destruction to the operations of an organization. These are risks that can be precipitated as a result of the following circumstances:
i) Fire outbreak ii) Lighting
iii) Explosion iv) Riot and strike v) Malicious damage vi) Impact damage vii) Earthquake
viii) Storm, tempest and flood, and
ix) Bursting and overflowing of water pipes, tanks and apparatus.
The control measure for these risks is the insurance policy covered under Fire and other Perils insurance. It is the responsibility of the risk manager that these risks are transferred to insurance company.
This is in view of the fact that the cost of replacing damaged operating facilities and materials could be enormous. In addition, the inherent losses could equally lead to stoppage of production.
Kaye (2004) suggested the following measures for handling the risk of fire in the organization:
i) Maintenance of fire extinguishers;
ii) Proximity of fire service;
iii) Heat transfer to neighbouring structures and materials;
iv) Train those in charge of those materials and structure;
v) Constant monitoring of materials movement;
vi) Detection of possibility of fire outbreak;
vii) Active fire safety features;
viii) Education on the way workers should behave and how they will exit the premises;
ix) Precaution against toxicity; and
x) Proper treatment of waste and run off.
The risks manager could consider the issue of developing a fire modeling towards helping him predict the development of a fire and the damaging side effect.
SELF ASSESSMENT EXERCISE 2
What are the relevant measures for guiding against risk of fire outbreak in organization?
3.2.2 Security of Organization Property
The stealing of physical or intellectual assets of the organization could arise in form of armed robbery operation in a place where cash is kept.
Relatedly, fraud could be regarded herein as theft because it denies the organization of its physical assets by actions of outsiders or connivance between outsiders and staff of the organization.
Appropriate policy acts of frauds and similar misdemeanour is the Fidelity Guaranty Insurance policy. However, if there is insider collusion, the insurance organization may not pay for such loss under its theft insurance.
Generally, it is the responsibility of organizations to put in place machineries that will make it difficult for unscrupulous people to steal any of their assets.
Such measures include the following:
protective fences at controls on points of entry;
simple locks with a number of keys;
sophisticated electronic pass card; and
Closed Circuit Television (CCTV).
3.2.3 Security of Employees and Information
Security in this regards connotes health and safety of the workers within the premises of the organization. In order to ensure this, the risk manager should:
Institute necessary measures to prevent injuries to all human beings within the organization, employees and visitors;
Implement the provisions of the Health and Safety at Work Act or Factory Act as the case may be;
Ensure the provision for First Aids for any emergency cases;
Educate the workers on safety measure;
Ensure periodic campaigns on health and safety in the premises;
For the information technology facilities, the risk manager should advise the management on measures to take guiding their information such as:
The use of passwords for computers
Have backups against loss of these intangible assets
Installation of antivirus facilities for the computers;
Maintaining clean environment for the computers;
Provision of cooling system for the IT facilities; and
Proper labeling of the computers and other IT facilities in the company‟s name.
3.2.4 Safety of Company’s Product
Elimination of health and safety risks from the company‟s products should be implemented because of their consumption or usage by human beings.
The company should ensure that its products meet the required quality standards as stipulated by Standards Organization of Nigeria and NAFDAC.
In addition, some companies have quality control units that monitor the quality of their products to ensure their compliance to laid down standards.
Kaye (2001) points out the problems of poor products such as follows:
a) An impaired product may need to be recalled to the factory for alterations or destruction.
The process of receiving a large number of widely distributed products is in itself expensive and damaging to customer relationships.
b) Such public recall can cause long-term damage to the confidence the public holds in the products and in the brand name.
c) A poor quality product may also cause damage and loss in a way that could result in litigation against the manufacturer.