RISK MANAGEMENT Class 1

OBJECTIVESDefine Risk and Risk Mgt.Risk Management MissionOperational Risk Management Considerations

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

What is Risk?

Determining Factors in Defining Risk

Probability

Harm

Severity

What is Risk?

Describing Risk

Probability of occurrence Subjective like

One in a million Rare, high, low One in three, thirty percent

What is Risk?

Describing Risk

Harmful consequences Descriptive like

Death Injury Destruction Disaster

What is Risk?

Describing Risk

Probability and Consequence Combined and expressed in math

10 million value (consequence) 2% loss probability

What is Risk?

Probability of Risk

Relates to; The chance that something might

happen The outcome / negative consequence

rated on a scale

What is Risk?

Assessing Risk

Probability and risk often guide our decisions personally and professionally

Each situation comes with some form of risk.

Three Levels of Risk

The community as a whole

The emergency response agency

Emergency response operations

Risk Management

Risk management activity that involves

evaluation/comparison of risks

Development of approaches to change probability or consequence

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

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

Control measures

Administrative SOPs Training (standards, requirements) Safe work practice Regulation, Standards, Enforcement

Goal make the task safe

Control Measures

Engineering Apparatus design Station layout Co system Tool design

Goal make the task safe

Control Measures

Personal Protection Bunker gear SCBA P2 kits EMS Ear protection

Goal make FF safe from hazards

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

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

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

Organizational RM

We hold the Public Trust

Fiduciary responsibility in its most critical application

Without police and FD society can easily disintegrate

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

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

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 ….

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

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

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.

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

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

Definitions and Concepts

The FDs mission is to manage its internal risk as it performs its mission of managing the external community risk

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)

Orgazitional RM System

FD Risk Management system Functions Components Activities

All members involved in the system

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

Organizational RM System

A dynamic process with goals & objective that are Clearly stated Understood Attainable Measurable

Everyone involvement

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

Steps in RM System

Identify risk exposure Evaluate risk potential Ranking and prioritizing risks Determining & implementing controls Evaluating and revising

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

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

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

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

Steps in RM System #4

Funding

Risk retention funding inside FD

Risk transfer funding outside FD

Cost / benefit analysis pg 42

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

Steps in RM Systems #4

Risk control categories Administrative

Training, SOPs, enforcement Engineering

Standards compliance Personal protective controls

All PPE

Steps in RM System #5

Evaluate and revise actions and techniques

What works What doesn't work as intended Continuous improvement

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

Legal Issues

Statutory immunity granted the FD because of its mission

Gives authority to decide risk benefit

But limited to scope of FD services

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

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

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

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

Legal Issues

Risk mgt must consider

OSHA (IDOL) standards Legal in nature

Consensus standards NFPA Not technically legal but carry great weight

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

Special Concerns

Risk vs. Safety Risk vs. benefit

Many risks can be managed in non-emergency operations to regulate the level of risk during an emergency operation

RM in Emergency Response

Operational RM refers to the risk of death or injury to responders

In order to survive the FD must manage risk during emergency ops. The most dangerous job?

RM in Emergency Response

Must extend throughout the FD Top

Line and staff Chiefs, All Line officers Every FF Mutual aid members Others, PD, PW, OEM

RM in Emergency Response

Risk vs. Benefit old perception

Get fire out at all costs (we are heroes)

New perception Reasonable risk (we are still heroes)

RM in Emergency Response

Expectation of public Act rationally Act professionally Control situation without unnecessary

exposure to danger Adequate resources people / equipment Adequate training

RM in Emergency Response

Recognized danger should be avoided

Acceptable operational risks Directed toward saving property Inherent risks Unknown hazards

Risk Benefit

RM in Emergency Response

Fundamental principle in safety and health laws is employer responsibility to provide reasonably safe working conditions Recognize, identify evaluate dangers Take reasonable steps to protect

employees from those dangers

RM in Emergency Incidents

Real time risk management RM is fundamental at every level

during a incident RM is inherent in strategy and tactics

Identify risk Evaluate risk Manage risk

RM in Emergency Incidents

Standard approach to RM i.e. ICS Risk Assessment Guidelines

Activities presenting a significant risk shall be limited to life safety

Activities routinely employed to protect are inherently risky actions should be taken to reduce or avoid these risks

No risk is acceptable if life and property are not reasonably savable.

RM in Emergency Incidents Strategic plan defines

Where, when, and how RM must be considered and is

essential to strategic plan is the responsibility of command

personnel MUST be ongoing

Defensive vs. Offensive provide basic tactics to be used

RM in Emergency Incidents

Good size up a must Starts with first in Continues throughout by command Is responsibility of all personnel

Chiefs Company officers F/F others

RM in Emergency Incidents

Incident safety officer(s) all 6 sides, 360, the whole banana

Problems Hazards Inconsistent observations Any factor presenting a safety issue

IC and Safety work together