MBA152041

According to the case Michael has to follow various risk control techniques to avoid
or reduce potential losses. To identify appropriate risk control technique, we have to
find the potential risk factors in each of Michaels exposure.
A. 2003 Ford damaged because of collision with another motorist:
These are the types of risk which occurs in a frequent basis, so the most appropriate
risk management technique is Active Retention, as Michael is aware of all the risk
and must plan to retain all or part of the payments.
B. Liability lawsuit for negligent operation of car:
These risk arise out of the owners, ignorance or laziness, hence adopting Passive
Retention will help in reducing the loss. That is, of Michael has an Auto insurance to
cover all his unexpected losses or accidents. So having an appropriate liability
coverage will reduce the risk.
C. Loss of household and personal property due to grease fire in the kitchen:
These losses can be prevented to reduce its frequency of its occurrences. So Loss
Prevention which is one of the Risk control techniques must be adapted by Michael.
Michael can also opt for a Renters policy to eliminate losses of household and
personal items.
D. Disappearance of Contact lenses:
These are the losses which occur with high frequency and low severity, hence
Passive retention is the appropriate risk management technique which helps to
cover the risks which occur due to ignorance or negligence.
E. Waterbed leak that causes property damage:
Since Michael is aware of the risks involved in Waterbeds, Active retention is the
most suitable risk management technique as the individual is aware of the risk and
plans for partly or full retention. As discussed before Renters Policy will help
Michael to retain the costs of damage.
F. Physical assault by gang members in the park:
These risks can be avoided, try to retain or insure these kinds of risks will not be a
wise decision. Thus Avoidance will be an appropriate technique for this type of risk
or loss exposure.
G. Loss of Tuition assistance due to Michaels father expiry:
Loss exposure of Michaels father could have been retained by an Insurance policy.
If Michaels father is insured, the funds received from the policy will help him to
cover his tuition fees.