Risk Control & Mitigation Strategies Flashcards
7 cards from real RIMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Control & Mitigation Strategies flashcards as text
Which risk control technique involves restructuring operations so that a single event cannot cause a total loss?
Answer: Separation of exposures
Separation of exposures spreads assets or operations across locations so no single event destroys the entire value.
A company installs automatic sprinkler systems in its warehouses. This is an example of:
Answer: Loss reduction
Loss reduction measures reduce the severity of a loss after it begins; sprinklers limit fire damage once ignition occurs.
Which of the following best describes a 'pre-loss' risk control objective?
Answer: Preventing losses before they happen
Pre-loss objectives focus on preventing losses from occurring in the first place, not responding after the fact.
A pharmaceutical company decides to outsource its hazardous chemical storage to a licensed third party. Which risk control strategy does this represent?
Answer: Contractual risk transfer (non-insurance)
Outsourcing hazardous activities to a third party via contract shifts the liability exposure without using an insurance policy.
The 'domino theory' of accident causation, developed by H.W. Heinrich, suggests that most accidents result from:
Answer: A sequence of factors starting with social environment and ending in injury
Heinrich's domino theory proposes a five-factor chain—social environment, fault of person, unsafe act/condition, accident, injury—where removing any domino prevents the injury.
Which loss control strategy is most appropriate when the frequency of losses is high but severity is low?
Answer: Loss prevention
Loss prevention is most cost-effective for high-frequency, low-severity losses because reducing occurrence frequency directly lowers total loss costs.
A business continuity plan (BCP) primarily addresses which post-loss objective?
Answer: Ensuring survival of the organization after a loss
A BCP is a post-loss tool designed to maintain critical functions and ensure organizational survival following a disruptive event.