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Advantages of Risk Management Plan
A risk management plan is a document that outlines potential risks and what impact they will have and how to address the risks if and when they occur. The plans should be reviewed on a regular basis so as to ensure that the information is up to date and captures any new risks. There are several step that are taken during the risk management. Step one is to identify possible risk and its effect on the organization and then assess the risk. Dealing with the risk is the fourth step and finally monitor and review the plan. Risk management as several components such as define the risk, come up with assumptions regarding the risks, coming up with structures , risk probability assessment,cost implication , scheduling and noting down the risks in order of impact. This paper will discuss importance of a risk management plan for companies.
The risk management plan assists organizations identify risks that might not be easily seen. A thorough investigation is carried out by a risk management team. This enables risks that are not obvious to be identified. The organization is able to save costs because it is able to deal with all the risks facing it.
The organization is able to defend itself against possible cases using the risk management plans. The organization may fail to possible lawsuits that face the organisations all the time from various sources. A thorough risk management plan will protect the organization from such lawsuits saving money and reputation of the organization.
A risk management plan assist in recognizing and taking control of work hazards. The organization is able to identify hazards at the workplace when coming up with a risk management plan. Control measures on how to deal with the hazards before they occur are laid down on the plan. The organization is able to avoid accidents at the workplace and maintain a safe working environment.
The organization is able to create awareness of the risks through an analysis in the risk management plan. The plan will help the employees become aware of the risks that could affect them at their work place. Employees are also trained on how to avoid risks using the risk management plan. This ensure that employees know how to protect themselves from the risks.
The risk management plan will ensure the law is followed when setting the standards of managing risks. The organization is assisted in ensuring that the law is followed so as to avoid being taken to court. The business could be closed down as a result of failing to follow the law.

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