The risk manager should develop allocate some funds into risk insurance. This will enable the company gets the necessary funds to be able to reduce losses (Rejda 49). The manager should also try to make sure that there are other potential partners, and the company will be able to provide services to other partners. The manager should also make sure that the company will be able to place the buses in garages where they will be taken care of during some (at least, a short period). The manager should also make sure that employees will not be left out and will be secured (Rejda 54).
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The company can have several loss exposures. These are income loss exposure as the company will not get the profit it could obtain through cooperation with the school board (Rejda 46). Property loss exposures are also possible as without working some mechanisms and equipment may be out of order. There are risks that some employees could get fired or quit due to financial constraints of the company.
Notably, insurance can help handle the exposure losses mentioned above. Thus, the insurance can cover possible losses of income, ensure proper maintenance of equipment, and regular payments to the personnel (Rejda 50). Apart from this, the risk manager can focus on looking for new partners. In case the school board refuses to cooperate with the company, they will be able to have contracts with other partners.
Furthermore, the risk manager can develop a chart of vacations for employees during a certain period. People can have extra-vacations during a week or even several days. During this time, the company will have to sign new contracts and start cooperation with new partners. One of the last steps to undertake is to sell or utilize some buses. This will reduce property exposure losses. Of course, this step can be undertaken if the company does not find new partners within a short period.
One of the sources to pay losses is insurance. Of course, some companies do not resort to this opportunity as they think they are wasting money, but it is an effective strategy to employ. Insurance is an effective and rather cheap way to reduce losses in the highly competitive business world (Rejda 49). It is also possible to relocate some funds from other departments. For instance, the company can postpone the purchase of new buses and employing new people. Profits from other contracts can also be partially relocated, though this should be implemented carefully and this can be the last resort.
Human resources department is one of the units which can be involved. Even during the development of the strategy, the risk management should cooperate with HR professionals. Personnel should be aware of different scenarios and should be ready to react accordingly. Hence, the HR department should be involved. Apart from this, the marketing department should also cooperate with the risk manager as professionals of this department have to monitor all contracts and provide all the necessary information on the contracts. The risk manager will be able to estimate the risk associated with this or that contract. More so, marketing managers should look for new potential partners to reduce risks. These are major departments which have to be involved in the risk management program.
Rejda, George E. Principles of Risk Management and Insurance. Upper Saddle River, NJ: Prentice Hall, 2014. Print.
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