Sabtu, 20 November 2010

RISK MANAGEMENT


Risk management

Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1] or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attacks from an adversary. Several risk management standards have been developed including the Project Management Institute, the National Institute of Science and Technology, actuarial societies, and ISO standards.[2][3] Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety. The strategies to manage risk include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.




Certain aspects of many of the risk management standards have come under criticism for having no measurable improvement on risk even though the confidence in estimates and decisions increase.[1]

Introduction

This section provides an introduction to the principles of risk management. The vocabulary of risk management is defined in ISO Guide 73, "Risk management. Vocabulary."[2]
In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss and the greatest probability of occurring are handled first, and risks with lower probability of occurrence and lower loss are handled in descending order. In practice the process can be very difficult, and balancing between risks with a high probability of occurrence but lower loss versus a risk with high loss but lower probability of occurrence can often be mishandled.
Intangible risk management identifies a new type of a risk that has a 100% probability of occurring but is ignored by the organization due to a lack of identification ability. For example, when deficient knowledge is applied to a situation, a knowledge risk materializes. Relationship risk appears when ineffective collaboration occurs. Process-engagement risk may be an issue when ineffective operational procedures are applied. These risks directly reduce the productivity of knowledge workers, decrease cost effectiveness, profitability, service, quality, reputation, brand value, and earnings quality. Intangible risk management allows risk management to create immediate value from the identification and reduction of risks that reduce productivity.



Risk management also faces difficulties in allocating resources. This is the idea of opportunity cost. Resources spent on risk management could have been spent on more profitable activities. Again, ideal risk management minimizes spending and minimizes the negative effects of risks.

Method

For the most part, these methods consist of the following elements, performed, more or less, in the following order.
  1. identify, characterize, and assess threats
  2. assess the vulnerability of critical assets to specific threats
  3. determine the risk (i.e. the expected consequences of specific types of attacks on specific assets)
  4. identify ways to reduce those risks
  5. prioritize risk reduction measures based on a strategy

Principles of risk management

The International Organization for Standardization (ISO) identifies the following principles of risk management:[4]
Risk management should:
  • create value
  • be an integral part of organizational processes
  • be part of decision making
  • explicitly address uncertainty
  • be systematic and structured
  • be based on the best available information
  • be tailored
  • take into account human factors
  • be transparent and inclusive
  • be dynamic, iterative and responsive to change
  • be capable of continual improvement and enhancement

[edit] Process

According to the standard ISO 31000 "Risk management -- Principles and guidelines on implementation,"[3] the process of risk management consists of several steps as follows:

Establishing the context

Establishing the context involves:
  1. Identification of risk in a selected domain of interest
  2. Planning the remainder of the process.
  3. Mapping out the following:
    • the social scope of risk management
    • the identity and objectives of stakeholders
    • the basis upon which risks will be evaluated, constraints.
  4. Defining a framework for the activity and an agenda for identification.
  5. Developing an analysis of risks involved in the process.
  6. Mitigation or Solution of risks using available technological, human and organizational resources.

Identification

After establishing the context, the next step in the process of managing risk is to identify potential risks. Risks are about events that, when triggered, cause problems. Hence, risk identification can start with the source of problems, or with the problem itself.
  • Source analysis[citation needed] Risk sources may be internal or external to the system that is the target of risk management.
Examples of risk sources are: stakeholders of a project, employees of a company or the weather over an airport.
  • Problem analysis[citation needed] Risks are related to identified threats. For example: the threat of losing money, the threat of abuse of privacy information or the threat of accidents and casualties. The threats may exist with various entities, most important with shareholders, customers and legislative bodies such as the government.
When either source or problem is known, the events that a source may trigger or the events that can lead to a problem can be investigated. For example: stakeholders withdrawing during a project may endanger funding of the project; privacy information may be stolen by employees even within a closed network; lightning striking an aircraft during takeoff may make all people onboard immediate casualties.
The chosen method of identifying risks may depend on culture, industry practice and compliance. The identification methods are formed by templates or the development of templates for identifying source, problem or event. Common risk identification methods are:
  • Objectives-based risk identification[citation needed] Organizations and project teams have objectives. Any event that may endanger achieving an objective partly or completely is identified as risk.
  • Scenario-based risk identification In scenario analysis different scenarios are created. The scenarios may be the alternative ways to achieve an objective, or an analysis of the interaction of forces in, for example, a market or battle. Any event that triggers an undesired scenario alternative is identified as risk - see Futures Studies for methodology used by Futurists.
  • Taxonomy-based risk identification The taxonomy in taxonomy-based risk identification is a breakdown of possible risk sources. Based on the taxonomy and knowledge of best practices, a questionnaire is compiled. The answers to the questions reveal risks.[5]
  • Common-risk checking  In several industries, lists with known risks are available. Each risk in the list can be checked for application to a particular situation.[6]
  • Risk charting[7] This method combines the above approaches by listing resources at risk, Threats to those resources Modifying Factors which may increase or decrease the risk and Consequences it is wished to avoid. Creating a matrix under these headings enables a variety of approaches. One can begin with resources and consider the threats they are exposed to and the consequences of each. Alternatively one can start with the threats and examine which resources they would affect, or one can begin with the consequences and determine which combination of threats and resources would be involved to bring them about.

Assessment

Once risks have been identified, they must then be assessed as to their potential severity of loss and to the probability of occurrence. These quantities can be either simple to measure, in the case of the value of a lost building, or impossible to know for sure in the case of the probability of an unlikely event occurring. Therefore, in the assessment process it is critical to make the best educated guesses possible in order to properly prioritize the implementation of the risk management plan.
The fundamental difficulty in risk assessment is determining the rate of occurrence since statistical information is not available on all kinds of past incidents. Furthermore, evaluating the severity of the consequences (impact) is often quite difficult for immaterial assets. Asset valuation is another question that needs to be addressed. Thus, best educated opinions and available statistics are the primary sources of information. Nevertheless, risk assessment should produce such information for the management of the organization that the primary risks are easy to understand and that the risk management decisions may be prioritized. Thus, there have been several theories and attempts to quantify risks. Numerous different risk formulae exist, but perhaps the most widely accepted formula for risk quantification is:
Rate of occurrence multiplied by the impact of the event equals risk

Composite Risk Index

The above formula can also be re-written in terms of a Composite Risk Index, as follows:
Composite Risk Index = Impact of Risk event x Probability of Occurrence
The impact of the risk event is assessed on a scale of 0 to 5, where 0 and 5 represent the minimum and maximum possible impact of an occurrence of a risk (usually in terms of financial losses).
The probability of occurrence is likewise assessed on a scale from 0 to 5, where 0 represents a zero probability of the risk event actually occurring while 5 represents a 100% probability of occurrence.
The Composite Index thus can take values ranging from 0 through 25, and this range is usually arbitrarily divided into three sub-ranges. The overall risk assessment is then Low, Medium or High, depending on the sub-range containing the calculated value of the Composite Index. For instance, the three sub-ranges could be defined as 0 to 8, 9 to 16 and 17 to 25.
Note that the probability of risk occurrence is difficult to estimate since the past data on frequencies are not readily available, as mentioned above.
Likewise, the impact of the risk is not easy to estimate since it is often difficult to estimate the potential financial loss in the event of risk occurrence.
Further, both the above factors can change in magnitude depending on the adequacy of risk avoidance and prevention measures taken and due to changes in the external business environment. Hence it is absolutely necessary to periodically re-assess risks and intensify/relax mitigation measures as necessary.



Risk Options
Risk mitigation measures are usually formulated according to one or more of the following major risk options, which are:
1. Design a new business process with adequate built-in risk control and containment measures from the start.
2. Periodically re-assess risks that are accepted in ongoing processes as a normal feature of business operations and modify mitigation measures.
3. Transfer risks to an external agency (e.g. an insurance company)
4. Avoid risks altogether (e.g. by closing down a particular high-risk business area)

Later research[citation needed] has shown that the financial benefits of risk management are less dependent on the formula used but are more dependent on the frequency and how risk assessment is performed.
In business it is imperative to be able to present the findings of risk assessments in financial terms. Robert Courtney Jr. (IBM, 1970) proposed a formula for presenting risks in financial terms.[8] The Courtney formula was accepted as the official risk analysis method for the US governmental agencies. The formula proposes calculation of ALE (annualised loss expectancy) and compares the expected loss value to the security control implementation costs (cost-benefit analysis).

Potential risk treatments

Once risks have been identified and assessed, all techniques to manage the risk fall into one or more of these four major categories:[9]
  • Avoidance (eliminate, withdraw from or not become involved)
  • Reduction (optimise - mitigate)
  • Sharing (transfer - outsource or insure)
  • Retention (accept and budget)
Ideal use of these strategies may not be possible. Some of them may involve trade-offs that are not acceptable to the organization or person making the risk management decisions. Another source, from the US Department of Defense, Defense Acquisition University, calls these categories ACAT, for Avoid, Control, Accept, or Transfer. This use of the ACAT acronym is reminiscent of another ACAT (for Acquisition Category) used in US Defense industry procurements, in which Risk Management figures prominently in decision making and planning.

 Risk avoidance

This includes not performing an activity that could carry risk. An example would be not buying a property or business in order to not take on the legal liability that comes with it. Another would be not flying in order not to take the risk that the airplane were to be hijacked. Avoidance may seem the answer to all risks, but avoiding risks also means losing out on the potential gain that accepting (retaining) the risk may have allowed. Not entering a business to avoid the risk of loss also avoids the possibility of earning profits.
 Hazard Prevention
Hazard prevention refers to the prevention of risks in an emergency. The first and most effective stage of hazard prevention is the elimination of hazards. If this takes too long, is too costly, or is otherwise impractical, the second stage is mitigation.

 Risk reduction

Risk reduction or "optimisation" involves reducing the severity of the loss or the likelihood of the loss from occurring. For example, sprinklers are designed to put out a fire to reduce the risk of loss by fire. This method may cause a greater loss by water damage and therefore may not be suitable. Halon fire suppression systems may mitigate that risk, but the cost may be prohibitive as a strategy.
Acknowledging that risks can be positive or negative, optimising risks means finding a balance between negative risk and the benefit of the operation or activity; and between risk reduction and effort applied. By an offshore drilling contractor effectively applying HSE Management in its organisation, it can optimise risk to achieve levels of residual risk that are tolerable.[10]
Modern software development methodologies reduce risk by developing and delivering software incrementally. Early methodologies suffered from the fact that they only delivered software in the final phase of development; any problems encountered in earlier phases meant costly rework and often jeopardized the whole project. By developing in iterations, software projects can limit effort wasted to a single iteration.
Outsourcing could be an example of risk reduction if the outsourcer can demonstrate higher capability at managing or reducing risks.[11] For example, a company may outsource only its software development, the manufacturing of hard goods, or customer support needs to another company, while handling the business management itself. This way, the company can concentrate more on business development without having to worry as much about the manufacturing process, managing the development team, or finding a physical location for a call center.

 Risk sharing

Briefly defined as "sharing with another party the burden of loss or the benefit of gain, from a risk, and the measures to reduce a risk."
The term of 'risk transfer' is often used in place of risk sharing in the mistaken belief that you can transfer a risk to a third party through insurance or outsourcing. In practice if the insurance company or contractor go bankrupt or end up in court, the original risk is likely to still revert to the first party. As such in the terminology of practitioners and scholars alike, the purchase of an insurance contract is often described as a "transfer of risk." However, technically speaking, the buyer of the contract generally retains legal responsibility for the losses "transferred", meaning that insurance may be described more accurately as a post-event compensatory mechanism. For example, a personal injuries insurance policy does not transfer the risk of a car accident to the insurance company. The risk still lies with the policy holder namely the person who has been in the accident. The insurance policy simply provides that if an accident (the event) occurs involving the policy holder then some compensation may be payable to the policy holder that is commensurate to the suffering/damage.
Some ways of managing risk fall into multiple categories. Risk retention pools are technically retaining the risk for the group, but spreading it over the whole group involves transfer among individual members of the group. This is different from traditional insurance, in that no premium is exchanged between members of the group up front, but instead losses are assessed to all members of the group.

 Risk retention

Involves accepting the loss, or benefit of gain, from a risk when it occurs. True self insurance falls in this category. Risk retention is a viable strategy for small risks where the cost of insuring against the risk would be greater over time than the total losses sustained. All risks that are not avoided or transferred are retained by default. This includes risks that are so large or catastrophic that they either cannot be insured against or the premiums would be infeasible. War is an example since most property and risks are not insured against war, so the loss attributed by war is retained by the insured. Also any amounts of potential loss (risk) over the amount insured is retained risk. This may also be acceptable if the chance of a very large loss is small or if the cost to insure for greater coverage amounts is so great it would hinder the goals of the organization too much.

 Create a risk management plan

Select appropriate controls or countermeasures to measure each risk. Risk mitigation needs to be approved by the appropriate level of management. For instance, a risk concerning the image of the organization should have top management decision behind it whereas IT management would have the authority to decide on computer virus risks.
The risk management plan should propose applicable and effective security controls for managing the risks. For example, an observed high risk of computer viruses could be mitigated by acquiring and implementing antivirus software. A good risk management plan should contain a schedule for control implementation and responsible persons for those actions.
According to ISO/IEC 27001, the stage immediately after completion of the risk assessment phase consists of preparing a Risk Treatment Plan, which should document the decisions about how each of the identified risks should be handled. Mitigation of risks often means selection of security controls, which should be documented in a Statement of Applicability, which identifies which particular control objectives and controls from the standard have been selected, and why.

Implementation

Implementation follows all of the planned methods for mitigating the effect of the risks. Purchase insurance policies for the risks that have been decided to be transferred to an insurer, avoid all risks that can be avoided without sacrificing the entity's goals, reduce others, and retain the rest.

Review and evaluation of the plan

Initial risk management plans will never be perfect. Practice, experience, and actual loss results will necessitate changes in the plan and contribute information to allow possible different decisions to be made in dealing with the risks being faced.
Risk analysis results and management plans should be updated periodically. There are two primary reasons for this:
  1. to evaluate whether the previously selected security controls are still applicable and effective, and
  2. to evaluate the possible risk level changes in the business environment. For example, information risks are a good example of rapidly changing business environment.  
LIMITATION
If risks are improperly assessed and prioritized, time can be wasted in dealing with risk of losses that are not likely to occur. Spending too much time assessing and managing unlikely risks can divert resources that could be used more profitably. Unlikely events do occur but if the risk is unlikely enough to occur it may be better to simply retain the risk and deal with the result if the loss does in fact occur. Qualitative risk assessment is subjective and lacks consistency. The primary justification for a formal risk assessment process is legal and bureaucratic.
Prioritizing the risk management processes too highly could keep an organization from ever completing a project or even getting started. This is especially true if other work is suspended until the risk management process is considered complete.
It is also important to keep in mind the distinction between risk and uncertainty. Risk can be measured by impacts x probability.

 Areas of risk management

As applied to corporate finance, risk management is the technique for measuring, monitoring and controlling the financial or operational risk on a firm's balance sheet. See value at risk.
The Basel II framework breaks risks into market risk (price risk), credit risk and operational risk and also specifies methods for calculating capital requirements for each of these components.

 Enterprise risk management

In enterprise risk management, a risk is defined as a possible event or circumstance that can have negative influences on the enterprise in question. Its impact can be on the very existence, the resources (human and capital), the products and services, or the customers of the enterprise, as well as external impacts on society, markets, or the environment. In a financial institution, enterprise risk management is normally thought of as the combination of credit risk, interest rate risk or asset liability management, market risk, and operational risk.
In the more general case, every probable risk can have a pre-formulated plan to deal with its possible consequences (to ensure contingency if the risk becomes a liability).
From the information above and the average cost per employee over time, or cost accrual ratio, a project manager can estimate:
  • the cost associated with the risk if it arises, estimated by multiplying employee costs per unit time by the estimated time lost (cost impact, C where C = cost accrual ratio * S).
  • the probable increase in time associated with a risk (schedule variance due to risk, Rs where Rs = P * S):
    • Sorting on this value puts the highest risks to the schedule first. This is intended to cause the greatest risks to the project to be attempted first so that risk is minimized as quickly as possible.
    • This is slightly misleading as schedule variances with a large P and small S and vice versa are not equivalent. (The risk of the RMS Titanic sinking vs. the passengers' meals being served at slightly the wrong time).
  • the probable increase in cost associated with a risk (cost variance due to risk, Rc where Rc = P*C = P*CAR*S = P*S*CAR)
    • sorting on this value puts the highest risks to the budget first.
    • see concerns about schedule variance as this is a function of it, as illustrated in the equation above.
Risk in a project or process can be due either to Special Cause Variation or Common Cause Variation and requires appropriate treatment. That is to re-iterate the concern about extremal cases not being equivalent in the list immediately above.

 Risk management activities as applied to project management

In project management, risk management includes the following activities:
  • Planning how risk will be managed in the particular project. Plan should include risk management tasks, responsibilities, activities and budget.
  • Assigning a risk officer - a team member other than a project manager who is responsible for foreseeing potential project problems. Typical characteristic of risk officer is a healthy skepticism.
  • Maintaining live project risk database. Each risk should have the following attributes: opening date, title, short description, probability and importance. Optionally a risk may have an assigned person responsible for its resolution and a date by which the risk must be resolved.
  • Creating anonymous risk reporting channel. Each team member should have possibility to report risk that he/she foresees in the project.
  • Preparing mitigation plans for risks that are chosen to be mitigated. The purpose of the mitigation plan is to describe how this particular risk will be handled – what, when, by who and how will it be done to avoid it or minimize consequences if it becomes a liability.
  • Summarizing planned and faced risks, effectiveness of mitigation activities, and effort spent for the risk management.

 Risk management for megaprojects

Megaprojects (sometimes also called "major programs") are extremely large-scale investment projects, typically costing more than US$1 billion per project. Megaprojects include bridges, tunnels, highways, railways, airports, seaports, power plants, dams, wastewater projects, coastal flood protection schemes, oil and natural gas extraction projects, public buildings, information technology systems, aerospace projects, and defence systems. Megaprojects have been shown to be particularly risky in terms of finance, safety, and social and environmental impacts. Risk management is therefore particularly pertinent for megaprojects and special methods and special education have been developed for such risk management.[12] [13]

Risk management techniques in petroleum and natural gas

For the offshore oil and gas industry, operational risk management is regulated by the safety case regime in many countries. Hazard identification and risk assessment tools and techniques are described in the international standard ISO 17776:2000, and organisations such as the IADC (International Association of Drilling Contractors) publish guidelines for HSE Case development which are based on the ISO standard. Further, diagrammatic representations of hazardous events are often expected by governmental regulators as part of risk management in safety case submissions; these are known as bow-tie diagrams. The technique is also used by organisations and regulators in mining, aviation, health, defence, industrial and finance.[14]

Risk management and business continuity

Risk management is simply a practice of systematically selecting cost effective approaches for minimising the effect of threat realization to the organization. All risks can never be fully avoided or mitigated simply because of financial and practical limitations. Therefore all organizations have to accept some level of residual risks.
Whereas risk management tends to be preemptive, business continuity planning (BCP) was invented to deal with the consequences of realised residual risks. The necessity to have BCP in place arises because even very unlikely events will occur if given enough time. Risk management and BCP are often mistakenly seen as rivals or overlapping practices. In fact these processes are so tightly tied together that such separation seems artificial. For example, the risk management process creates important inputs for the BCP (assets, impact assessments, cost estimates etc.). Risk management also proposes applicable controls for the observed risks. Therefore, risk management covers several areas that are vital for the BCP process. However, the BCP process goes beyond risk management's preemptive approach and assumes that the disaster will happen at some point.

 Risk communication

Risk communication is a complex cross-disciplinary academic field. Problems for risk communicators involve how to reach the intended audience, to make the risk comprehensible and relatable to other risks, how to pay appropriate respect to the audience's values related to the risk, how to predict the audience's response to the communication, etc. A main goal of risk communication is to improve collective and individual decision making. Risk communication is somewhat related to crisis communication.

[edit] Bow tie diagrams

A popular solution to the quest to communicate risks and their treatments effectively is to use bow tie diagrams. These have been effective, for example, in a public forum to model perceived risks and communicate precautions, during the planning stage of offshore oil and gas facilities in Scotland. Equally, the technique is used for HAZID (Hazard Identification) workshops of all types, and results in a high level of engagement. For this reason (amongst others) an increasing number of government regulators for major hazard facilities (MHFs), offshore oil & gas, aviation, etc. welcome safety case submissions which use diagrammatic representation of risks at their core.
Communication advantages of bow tie diagrams: [14]
  • Visual illustration of the hazard, its causes, consequences, controls, and how controls fail.
  • The bow tie diagram can be readily understood at all personnel levels.
  • "A picture paints a thousand words."

Seven cardinal rules for the practice of risk communication

(as first expressed by the U.S. Environmental Protection Agency and several of the field's founders[15])
  • Accept and involve the public/other consumers as legitimate partners.
  • Plan carefully and evaluate your efforts with a focus on your strengths, weaknesses, opportunities, and threats.
  • Listen to the public's specific concerns.
  • Be honest, frank, and open.
  • Coordinate and collaborate with other credible sources.
  • Meet the needs of the media.
  • Speak clearly and with compassion.

 


COMPREHENSIVE GENERAL LIABILITY, D & O AND COMMERCIAL LIABILITY


Public & Products Liability Insurance (Comprehensive General Liability = CGL)

CGL is designed specifically to meet the need for Public Liability Insurance as well as products more widely and therefore comprehensive wordings we use also known as Broadform Liability.

What does CGL?

CGL ensure legal liability to third parties in the event of Personal Injury or Property Damage that occurred during the policy period caused by an event or occurrence in connection with the business or activities of the Insured including legal expenses in connection with the things they will.

Warranty CGL is not only limited to companies or industrial activity in the neighborhood / area where the activities (Public Liability) but can also be expanded, including to the products that are marketed to consumers (Products Liability)

CGL is designed to provide comprehensive protection and automatically have been equipped with extension clauses that required the wordings are easy to read and understand.

Potential Claims

Along with increased awareness of individual and public understanding about their rights under the law and legislation in force, then in the event of discomfort and / or losses ditimbukan by a company or industrial activity, then people will tend to use their rights to sue by law.

Not to mention when it comes to products, kasadaran consumers' rights to obtain a good quality product is something that can not be negotiable, the Consumer Protection Act and various other laws and regulations provide a high appreciation for the rights of consumers.

Faced with the legal process is not an easy matter and certainly not the case that cheap, as known to the legal process could take a long time starting from the level of subpoena, court Negri, the level of appeal in the High Court and not infrequently have to proceed to appeal or judicial review in the Supreme Court .

You can imagine how much it costs to be incurred for the costs of the case, attorney fees, consultant fees not to mention pay compensation for loss of property especially concerning one's soul.

Anyone who needs CGL?

Almost all people or activity requires protection CGL , ranging from Liability someone as an owner or occupant of dwelling house, shop owners, restaurant, office, hotel, apartment manager, Mal, until the Industrial or Manufacturing activities, and so forth.

Building owners must be responsible for such activity or activities that take place in the neighborhood not to menimbukan loss to the neighbors and surrounding community, or of visitors or customers who come activity.

Industrial or Manufacturing activities are responsible not only limited to industrial activities that they do in the premises but also to the products, do not let menimbukan things that harm consumers, such as the danger of poisoning, disability or death.

Manufacturers or suppliers  of raw materials (raw material) is also not free from legal liability to third parties which may result from defects in material or material.

Children's toy makers are one example of an industry in desperate need of Insurance Products Liability to convince consumers that the products are not toxic, does not cause health problems so it is safe for children.

Service and maintenance services companies, Service Station, Laundry, Catering, etc. all requires protection CGL

How Do?

To get the protection of CGL is very easy, simply complete the prospective Insured Proposal Form, which contains information about the company's data, turnover, product data and limits of liability required.




Directors 'and Officers' (D & O) Liability Insurance - What & Why?

"People run companies today WHO cans be held "personally liable" for company performance "

Bahasa Indonesia, click here

  
[Why] Director, Officer and Commissioner of need "D & O"?

Ø         Responsibility and accountability are huge: the Director and Commissioner to personally sued by shareholders, creditors, customers, employees and the public at large, if he fails to perform its duties and responsibilities in running the company.

Ø         The increased oversight and regulation: Supervision and Regulation adopted by the Government and industry increasingly stringent, and sometimes confusing business as there are many interests involved, and sometimes overlapping between one and other regulations.

Ø         community legal awareness increasing, so that the aggrieved parties tend to use their rights to sue in court.

Ø         Director & Officer also must maintain the reputation, integrity and its assets from lawsuits by parties who feel aggrieved

Ø         The legal process can be very serious, expensive and exhausting, Director & Officer must ensure that competent and qualified lawyers to defend its interests.

Ø         With the "Directors '& Officers' (D & O) Liability" Director & Officer will be more confident to face business challenges because they have the financial back-ups to deal with claims and legal proceedings.

[What] is guaranteed in the Directors 'and Officers' (D & O) Liability?

D & O Liability guarantee Director, Officer and Commissioner of the company against legal liability for negligence, errors, violations in conducting its duties and obligations as a Director and Officer, such as:

Ø         negligence: negligence in performing its duties and obligations
Ø         Wrongful misstatement, misrepresentation: error in giving the statement or description
Ø         Breach of trust: breach of contract or trust
Ø         Breach of fiduciary duty or breach of warranty of authority: breach of duty or abuse of authority as a Director and Officer
Ø         Unlawful default: omissions or errors that led to the bankruptcy of the company

Including (1) compensatory damages: the settlement of disputes in court, (2) out-of-court settlements: settlement of disputes outside the court (3) defense costs and expenses: legal expenses and attorneys in defending claims, adan (4) costs of appointing legal expertise, the costs to appoint experts or legal experts concerned.

Directors 'and Officers' (D & O) Liability Provides insurance against:

  • Civil Proceedings : civil legal proceedings against directors and officers
  • Successful Defense of Criminal Proceedings : legal expenses which succeeded in defending the criminal law process
  • Official Investigations and Inquiries : legal expenses to assist the directors and officers in the investigation, inquiry and investigation
  • Employee Actions : lawsuits from employees in connection with the case-case dismissal, discrimination and sexual harassment
  • Outside Directorships : guarantees against directors and officers in the organization or association (excluding companies) in which they represent the company
  • Prospectus Liability : insurance against claims relating to the Offering / Prospectus by the company

In addition to the above warranty untama Directors 'and Officers' (D & O) Liability juga provides Auto Warranty Additional Extras on ...

Ø         Libel and Slander: defamation by written or oral

Ø         Intellectual Property: infringement or use of intellectual property rights to unauthorized
Ø         Employment Practice Liability: lawsuits from employees in connection with the case-case dismissal, discrimination and sexual harassment
Ø         Subsidiary Blanket Cover: automatic guarantee of all our subsidiaries

Ø         Official Investigation and Inquiries: legal expenses to assist the directors and officers in the investigation, inquiry and investigation
Ø         Severability and Non-imputation: warranty applies separately to each of the directors and officers
Ø         Additional Notification Period: extra claims reporting period is longer if the policies are not renewed again
Ø         Previous Security Offerings: warranties on the bid / Prospectus previously conducted
Ø         Advance Payment of Defense Costs: upfront payments for legal expenses and attorneys in defending claims

Available Additional Features (extended warranty with an additional premium) as:


Ø     External Positions (Outside Directorships): guarantees against directors and officers in the organization or association (excluding companies) in which they represent the company
Ø     Pollution: legal liability arising from pollution
Ø     Joint Venture Liability: legal liability arising from joint ventures

Ø     Prospectus Liability (for current or future offerings): a guarantee of supply / Prospectus which is and will be conducted.
Ø     Entity Cover: guarantee against the company as an entity

[Who] is guaranteed in the D & O Liability?

Insured or who is guaranteed in the D & O Liability is all the people who work in the company, either has been, is and who shall serve as: (1)  Director, (2) Officers, (3) Commissioner, (4) Secretary, ( 5) Employee even for all company employees

[Who] who can make a claim to the Director and Officer?

Director and Officer might be able to be prosecuted by (1) Regulatory Authorities, (2) Creditors, (3) Shareholders; (4) Competitors, (5) Members of the Public, (6) Liquidator / Receivers; (7) Employees ; (8) Customers; (9) Business partners

[How] a way to get D & O Insurance Quotes?

Clients must complete a proposal form and the financial report in order to provide full information such as business or services provided, total revenue, claims history, and others for underwriting consideration.

Terms and conditions of coverage provided based on information provided (including but not limited to) on several factors as follows:

Ø         Area business or services provided - whether including risk categories low, medium or high, such as hi-tech industry, telecommunications, and financial institutions are included in the high risk category.

Ø         Total assets and income - the greater the assets and income typically indicate higher risk levels

Ø         USA / Canada exposures: if companies do business or security listing on the USA / Canada

Ø         Listing Status: whether the companies listing on stock exchanges, in the "stock exchange" any country

Ø         Mergers and Acquisition: whether a company merger or acquisition?

Ø         client's claim history - if ever there is a claim, the type and amount of loss

Ø         Limit of liability and deductibles required



Commercial General Liability

Diner awarded HKD10m (USD1.28m) far fall on slippery Stairs
Hong Kong: A diner WHO Became a quadriplegic after slipping on the Stairs of a restaurant has been awarded More Than HKD10m (USD1.28m) for his injuries. He Had Sued for HKD13.4m (USD1.72m).
On 1 April 2001, the diner Fell Down a Staircase in the restaurant, resulting in severe head and spinal injuries.

The judge found the restaurant owner That Had breached his duty of care by Failing to Ensure the Stairway, the which was Quite STEEP, 60 cm wide and Had only one hand rail


Man was hit by a remote-control toy helicopters and needed brain surgery

Hong Kong: An emergency brain surgery was Necessary after a 44-year-old man was hit by a friend's remote control toy helicopter on 13 January 2008. The man sustained a 20 cm-long wound to the back of his head. The helicopter weighed six kilograms, Could fly up to 90 km an hour and Had 1.5 meter-long blades.

The accident occurred at a government site with a warning sign prohibiting flying remote-control toys.


Man injured in visit to Tai Po's Wishing Tree seeks damages

Hong Kong: A man is seeking compensation from the government after being Seriously injured by afalling branch from Tai Po's Wishing Tree, Nowhere he was, Asking for good fortune.
He suffered a broken hip, and later developed symptoms of a stroke after undergoing a hip operation. He now requires 24-hour care.


Roller coaster derailed

Japan: In May 2007, a roller coaster partly derailed in an amusement park in Suita, Osaka Prefecture. One woman was killed and 19 others injured were the resource persons. The second car of the roller coaster derailed and leaned outward.

According to the police, the axle shaft of the second car broke about 200 meters before the end of the run. The wheels of the second car Came off and were the resource persons on the ground discovered

In February 2007, the amusement park Should have been inspected but due to no available garage, the inspection was postponed Until 15 May.
May improper safety management have led to the accident


 

CNY800, 000 (USD114, 000) Compensation for Man Who Lost legs from train


China: A man fell off a Beijing subway station platform in 2005 and lost his legs Pls a train pulled into the station. He was later awarded CNY800, 000 (USD114, 000) in compensation. The metro, the which Had to pay 80% of the man's medical costs, is considering an appeal.



Intoxicated Woman Fell into a ventilation shaft

China: A woman on the way to go to the toilet Fell into a ventilation shaft, sustaining a brain injury. She is suing the real estate management company for compensation

The woman needed to use the Restroom as she was in a taxi Returning from a party. Since there were the resource persons no public facilities in the vicinity, she instead found a Covered area with a flowerbed note Realizing there was a deep ventilation shaft for a commercial building. She fell to the basement through the three-meter-deep vent and hit the ground with her head.

The 33-year-old woman is seeking CNY70, 000 (USD9, 629) compensation for her brain injury. She is Asking for compensation for mental anguish and disability compensation.



MYR133, 000 (USDA2, 195) payout for Widow

Malaysia: The Widow of an Englishman WHO was killed by a falling branch at the Botanical Gardens has been awarded MYR133, 000 (USD42, 195) in compensation. The Widow Agreed to the settlement Almost ten years after the death of her husband in May 1998. The suit was filed in April 2001, accusing the Waterfall Gardens committee of negligence in maintaining the gardens.



Paralysed cyclist awarded SGD800, 000 (USD580, 000)

Singapore: A cyclist was paralysed from the neck down, after he crashed into a barrier cycling in July 2005. In March 2008, he received SGD800, 000 (USD580, 000) in a court settlement. Lifelong treatment was estimated to be SGD700, 000 (USD507, 500)

The Claimant Sued the Land Transport Authority (LTA) and the contractor of the erected steel heavy-duty barrier for personal injuries the caused by an "unsafe barrier" which Had been installed at the end of a bridge. The contractor did not post-Signs to alert cyclists to the barrier at one end.

The Claimant sustained spinal injuries, lost the feeling of his Limbs and Had Difficulties breathing. He Had to Spend six months in the hospital.