Chapter 8 Risk Management Plans 8 Risk Management Plans C H A P T E R

CAPRA Standards In the recreation and park field, it is an industry standard for each agency to have a risk management plan. Agencies must follow the risk management plan. See figure 8.1 in the text.

Risk Management Process Step 1: Identify the risks. Step 2: Assess the risks (i.e., probability, impact, and severity). Step 3: Develop risk strategies (i.e., reduce, avoid, transfer, retain). Step 4: Evaluate and continually assess the risks.

Table 8.1

Step 1: Identification of Risks Identify both internal and external sources of risk. Types of risks or hazards –Environmental –Infrastructure –Program –Crisis management –Transportation

Sources of Information Heuristics Historical records Similar organizations and programs State or national professional organizations Accreditation bodies National statistics

Step 2: Assessment of Risks Determine severity (column 7 of table 8.1). Severity is a composite index. Probability (column 3 of table 8.1) is the likelihood that the event will occur. Impact (column 5 of table 8.1) is the effect of the event on the organization and its future operations.

Determine Probability Probability (column 3 in table 8.1) is the likelihood that the event will occur. Probability levels –High: Occurs commonly or semicommonly –Medium: Occurs occasionally –Low: Occurs infrequently; people are surprised when it occurs Actual probabilities (0-1) can also be used.

Table 8.2

Determine Impact Impact (column 5 in table 8.1) is the effect of the event on the organization. Impact levels –High: Major loss; loss of programs or community support or going out of business –Medium: Some media attention, some decrease in participation, community support may wane –Low: Little or no interruption to program

Table 8.3

Determine Severity Severity (column 7 of table 8.1) is a composite index of probability and impact. Use table 8.4 to calculate severity. Generally, events with high probability and high impact have high severity.

Table 8.4

Step 3: Risk Management Strategies Mitigating or managing risks Four approaches –Reduce: One takes measures to reduce the likelihood that an incident will occur –Avoid: Elimination of the risk or the hazard that results in the risk –Transfer: Insurance, waivers, contracting –Retain: Organization absorbs the risk

Mitigation and Contingencies Using the risk management strategies of reduction and avoidance, reassess severity. Mitigation reduces probability and contingencies reduce impacts. Calculate effective probability (column 4 of table 8.1) and effective impact (column 6 of table 8.1). Calculate effective severity (column 8 of table 8.1).

Table 8.6

Calculating Change in Effective Severity Convert severity and effective severity to probability (high: 0.8; medium: 0.5; low: 0.2). Total and calculate percentage change. The percentage change is the reduction in severity due to risk management strategies (23%, see table 8.8).

Table 8.8

Step 4: Evaluate and Assess Risks The risk management plan is a working document. Organizations can keep the plan up to date by reassessing the following: –Policies and practices –Procedures and forms –The risk assessment (step 1)

Risk Management Manual The manual includes the organization’s risk management plan. Section 1: Purpose, stakeholders, and guiding principles Section 2: General principles Section 3: Human resources (continued)

Risk Management Manual (continued) Section 4: Program-related functions (e.g., leases, contracts, waivers, warning, and health forms) Section 5: Risk management practices and procedures for facilities and developed areas (e.g., design, management, repair, and maintenance) (continued)

Risk Management Manual (continued) Section 6: Equipment needs (e.g., the purchase, lease, rental, maintenance, and repair of equipment) Section 7: Crisis management and emergency care Section 8: Transportation (e.g., coverage, required safety courses, rules and procedures, insurance, and reporting accidents and injuries)

Summary Having a risk management plan is considered an industry standard. Risk management is broader in scope than accident prevention. Assess the probability, impact, and severity of the risks. Place the risk management plan in the risk management manual.