Fundamentals of Risk Management

Risk response
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because they are post-loss procedures. Some control classification systems include 
BCP and DRP as a fifth category of control.
The example in the box below illustrates that an organization will use all four 
types of control in order to build a robust set of risk responses. The road transport 
company will make use of all four types of controls in order to reduce road traffic 
accidents.
Take the example of a road transport company and the desire to reduce the number of
road traffic accidents per million miles driven, and the options for reducing this number.
The company can look at the preventive, corrective, directive and detective control
hierarchy and decide the following:
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The scope for introducing preventive controls includes review of vehicle routing and 
realistic estimates on delivery schedules so that drivers do not need to drive dangerously 
to arrive on time.
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The types of corrective controls that will be introduced include enhanced maintenance 
procedures and improved arrangements for drivers to report vehicle defects.
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Enhanced directive controls will be based on defensive driver training and the provision of 
a vehicle driver handbook with practical advice that is easy to understand and follow.
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Although some detective controls are already in place through the use of tachographs
in the vehicles, the company may decide to also introduce a routine review of drivers’ 
licences to check for penalty points.
Other controls that might be evaluated by the transport company include routine inspections 
of vehicles to discover and report damage, and a review of fuel consumption to identify drivers 
with an aggressive driving style. The company is then in a position to introduce structured and 
measurable loss-control programmes to reduce the overall cost of running the fleet of vehicles.
application of the 4ts