What do you do about Risk ...????

Definers, if I can address them that way, define risk as a condition in which there is a possibility of an adverse deviation from a desired outcome that is expected or hoped for.

Risk is present everywhere and at times. It can take many forms and can if translated in to reality can lead to devastating consequences which would never want. There is risk while leaving commuting, while investing in a business, while building a new project, even while cooking at home etc....

So, what is that we can do about Risk?

The following are the ways in which we could deal with Risk

Avoiding Risk

The best option to avoid the consequences of a risk is to avoid the risk altogether. For example, if there is a risk of injury in travelling by train, then by avoiding travelling by train would avoid the risk altogether. However, many a times avoiding risk is not practical as certain actions need to be performed in spite of risk being present.

Controlling Risk

This may prove better than the earlier method. By controlling risk, we can take steps to prevent or reduce the losses. For example, if there is a risk of fire in a shop, then the shopkeeper may install smoke detector and water sprinklers. However, controlling risk can neither undo the damage nor complete avoid the consequences.

Accepting Risk

By this we can accept or retain the loss due the risk and not take steps to either avoid or prevent it. However, such a method should and is only logical for risk whose consequences are not large. For example, we may accept the risk and not take any measures against theft of an inexpensive wristwatch.

Transferring Risk

A more financially prudent method to deal with risk is to transfer the risk. When you transfer risk to another person, you are shifting the financial responsibility for that risk to the other party. This can be achieved through insurance coverage.

Various risks can be covered by insurance which are broadly divided into property damage, liability and personal risk.

Importance of insurance arises from the fact that certain of the insurance covers have the capacity to put the insured back into the same financial status as the insured was before the happening of an unwanted event.

Read more about various kinds of Insurance Covers that exist and how you can enjoy a carefree life - Click Here