Insurance is Only One of Four Methods to Manage Risk

Building blocks of managing riskBuying insurance only covers a portion of the risk management puzzle.  There are actually four methods in which to manage risk.

The four methods to manage risk are avoidance, reduction, transfer and retention.

Avoidance is the removal of the potential exposure or Hazard. An example is homeowner liability claims from dog bites. If you don’t want to be sued from your dog biting someone, then manage the dog to avoid the risk.

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