Risk management is defined as identification, assessment and economic control of those risks that endanger the assets and earning capacity of a business.

• Risk Identification
• Assessment Risk
• Control Risk

Risk Management is a process through which the companies control their level of risk and the key elements of an effective risk management programme are: policy, procedures and standards Policy describes the objectives of the Risk Management programme. Procedures determine how the policy will be implemented. Standards provide guidance on particular issues.

• The likelihood of its occurrence is sufficiently remote
• The consequences are not severe.

• Changes in the processes.
• Transferring all or part of the risk.

• Their risks are different.
• Operations and organizations are unique.
• Corporate culture is unique

• Legislation is now more extensive
• Legislation is now more stringent
• Risk Assessment is growing more common in many areas of legislation.

• Is no longer the cheap option.
• Open ended cover is no longer widely available.
• Insurance companies like their clients to actively manage their risks.
• It does not compensate the full loss.
• Pay outs may be delayed.

• Corporate customers want to pass on their legal responsibilities to their suppliers.
• Customers are more litigious.
• Shareholders are more aware of the risks.

• Management has learned from other firms disasters.
• Companies are becoming professional.
• Becoming global.

• The first and more traditional type is non-entrepreneurial risk, typically fire, pollution, fraud risks. Companies used to protect against these by buying insurance, which is not a complete protection and is also not the only one the second type of risk is entrepreneurial risk. This occurs when a company builds a new plant, launches a new product or buys a company. If the company gets its forecast wrong, it loses money. There are ways of reducing these risks by way of adopting a proper risk management system