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Risk Control-Assignment 3

Assignment 3
Chapter 8
Environmental Risk
Chapter 9
Crime and Cyber Risk
Chapter 10 Fleet Risk
Chapter 11 Smart Products and Risk Management
Question 1
In considering how losses from fleet operations can be controlled, fleets are viewed as
systems with subsystems and system components.
a) Identify and briefly describe the four common characteristics of every system, and briefly
discuss the components of a fleet system.
1. Components & Purpose
a. Components are items that are primarily included in a fleet system that poses
risks that need to be controlled to maintain the fleer’s safety
b. Purpose: the essential motive of any fleet system is to transport cargo or persons
2. Environment – is where the component of a system function. Environments such as legal,
physical, economic, and competitive i.e. highways, weather conditions, laws, terrain etc.
3. Life cycle – A system has a five-phase life cycle which it passes through from conceptual
to Disposal phase. These are series of stages in form and functional activity through
which a system component passes during its lifetime
4. Systems and Relationship – Every system is part of several larger systems which relates
to or pertains to the system common characteristics in terms of its components (including
the subsystems), purpose, environments as applicable. i.e. the fleet system is part of
several larger systems, such as its overall transportation system and the government’s
road system, which makes the fleet system nested within these other systems.
Component of a fleet system:
1. Vehicles – An organisation must have a full understanding of the intended use of a
vehicle before selecting a suitable for the particular tasks required, because fleet
safety is influenced by the selection of task appropriate vehicle for purchase
2. Vehicle maintenance – Vehicle maintenance on an organisation’s fleet affects its
losses from fleet operation in 2 ways: 1) proper maintenance improve fleets safety
and reduce vehicle loss 2) Due to its potentially hazardous activities, it must be
performed safety. So, controlling maintenance loss exposures is essential to overall
fleet safety as well as embarking on regular preventive maintenance which is crucial
to safe reliable vehicle performance and reduction in possibility of an accident
3. Operators/Drivers – A crucial component of a fleet system which selection and others
(training, supervision, license, dismissal) is often the focus of fleet safety
management to prevent accident since majority of accidents on/off public roadways
are as a result of driver error, inattention, lack of training, or another human.
4. Cargoes – A primary component of fleet system is the cargo being transported. The
word cargo is used as a board term that encompasses both freight and passengers.
Cargo can be transported in any kind of passenger car, truck, bus, or other motor
vehicle on or off public roads.
5. Routes – Suitably safe, cost-effective, reliable routes are those that present no
unacceptable risks to vehicles, drivers, and cargoes; reasonable in distance and offer
some flexibility of alternative if the main route is blocked or closed.
6. Vehicle schedules – Is the plan and timetable for vehicle driver. A sound safety
oriented one provides enough time for vehicle drivers to complete their trips on
schedule without rushing and without conflicts. A driver’s schedule should allow
flexibility to deal with unforeseen events such as a stalled engine.
b) For the elements of a motor vehicle transportation system, (vehicles, maintenance,
operators and cargo), discuss how the potential hazards from each of these elements can be
 Vehicles – can be controlled by the selection of task-appropriate vehicle for purchase,
the establishment of safe operating practices, and vehicle maintenance and
 Maintenance – Vehicle maintenance potential hazard can be control by proper
maintenance which improve the fleet safety record, hence reduce vehicle losses.
Secondly, being a potentially hazardous activity, it must be performed safety. Thirdly,
regular preventive maintenance should be done on a scheduled basis irrespective of
mechanical problems. Fourthly preventive maintenance can keep accidents from
happening and enable vehicle to complete trips on time without breaking down.
 Operators – Fleet safety management often focuses on how drivers are selected;
trained; supervised; licensed; and when necessary dismissed. i.e. a critical matrix
based on motor vehicle record (MVRs) showing the number of at-fault accidents and
the number of moving violations help determine acceptable MVRs for hiring drivers
and employment continuation.
 Cargo – An organisation must regularly check that its cargoes and vehicles are match
safely. What that means is that although cargo can be transported in any kind of
passenger car, truck, bus, or other motor vehicle on or off the roads, the specific
cargo must be used or suitable for the particular vehicle used to avoid cargo or
vehicle damages, and this is only when the vehicle poses no unreasonable risk to the
cargo and the cargo also poses no unreasonable risks to the vehicle.
Question 2
a) Describe how these source treatment methods modify pollutants that have already been
i) Recovery process – This process separate, remove, and concentrate reusable
material from the waste i.e. the pollution. Thee reusable material is often sold/recycled back
into the reusable process and when the reusable material is also the pollution, the recovery
process reduces the hazardous nature of the waste. In some cases, the recovery process
requires additional treatment before it can be safety and legally disposed of i.e. Activated
carbon absorption - Chemical spill response, Heavy metal recovery and Distillation - Solvent
ii) Physical and chemical treatment processes – Many are available to reduce the
volume of waste, permit more economical and effective treatment, make waste less
hazardous, and destroy the toxic component of waste. Similar to the recovery processes but
primarily for treatment rather than recovery and reusing materials. Both chemical and
physical process are used for the separation and segregation of waste. Unlike the recovery,
the chemical process alters the hazardous nature of the waste. These processes may require
pre-treatment to prepare the waste for treatment i.e. filtration used to treat material such as
oily waste water, chemical precipitation to treat corrosives etc.
iii)Thermal processes – This process dissolve wastes either through combustion or
pyrolysis (chemical decomposition caused by heating in the absence of oxygen). In a matter
of seconds, it can destroy materials that would take many years to deteriorate in a landfill.
Many sophisticated one are available to treat materials such as solvents, PCBs, dioxins,
contaminated soil, and infectious waste
iv) Biological processes – These are living organism used to treat waste. Include aerobic
digestion (needing oxygen), anaerobic digestion (not needing oxygen), and composting (or
land application). Many chemicals are degradable through biological process using
formaldehyde, acetone, and isopropylaclcohol.
b) Identify and briefly describe basic risk control measures for source reduction.
a) Change or modifying equipment –improving the efficiency of production
equipment to produce less pollution
b) Substitute materials –replacing a hazardous material for a safer one or
substituting materials to improve process efficiency and to produce less pollution
c) Redesign process – improving the fundamental way an operation is accomplished
to produce less pollution
d) Redesign product – changing the fundamental product characteristics and
features of the manufacturing process to produce less pollution
e) Change operations or human behavior –changing established procedures and
practices, for example, tires to shingles to produce less pollution
Question 3
a) Describe the categories of cyber risk liability loss exposures and provide an example of
1. Bodily Injury and Property Damage Liability – Are generated from organisation
technologies related activities, such as transmitting electronic data, maintaining
information on or conducting business through websites etc.
a. Bodily Injury can occur because of an organisation software development e.g.
Injuries caused by error in program formulation –medical diagnostic
erroneously coded by a software developer who developed the program for
the physicians and pharmacists.
b. Property damage – can occur because of an organisation’s overall technology
operations, including those related to software, hardware, and electronic data.
E.g. Damage to host computer programs and operations
2. Personal and Advertising Injury Liability – Arising from the consequence of
advertisements of products for which the insured has assumed liability under contract
or agreement. Usually, part of many organisation general liability loss exposure
coverage. These are the possibility of liability resulting from offense such as false
detention, malicious prosecution, slander, libel, disparagement, violation of a person’s
tight of privacy, use of another’s advertising idea in one’s own advertisement and
infringing upon another’s copyright or slogan etc.
3. Intellectual Property Liability – This can affect an organisation’s copyrights,
trademarks, patents, or trade secrets. Example - Infringement from improper use of
copyrighted material in blogs
4. Errors and Omissions Liability – as organisation continue to expand their operation
into the cyber space, E&O liability presents the possibility of considerable damage to
an organisation financial, reputation, marketing standing, and goodwill. For example,
Design, manufacturing or service errors
b) Describe two ways an organization may be exposed to reputation risk through social
1. Social networking activities of employees may;
a. Post negative comments about employers, competitors, customers, or others
associated with organization
b. Inadvertently disclose confidential business information
c. Employees’ inappropriate online behavior may reflect poorly on the
2. Negative information –true, false, misinterpreted, out of context - can reverse positive
image and damage reputation very quickly
Question 4
A property manager is considering investing in measures to mitigate the hazard risks
associated with building ownership. Identify examples of such measures that are enabled by
smart products.
1. Wireless sensor network (WSN) – used to detect and respond to leaks and malfunctions
or prevent on-site falls and injuries i.e. water sensors can monitor a heat irregularity and
detect the first signs of leakage before the tenants
2. Temperatures sensors provide alerts before a pipe freezes and are particularly useful in
vacant or temporarily unoccupied buildings.
3. Light sensors monitor illumination in parking lots, perimeter of structures and stairs,
eliminating hazard that could lead to liability claims and lawsuits
4. Motion sensors and surveillance cameras can deter crime before it occurs and document
suspicious activities
5. Thermal sensors, current sensors, and smoke detectors assess impending fire conditions
so that first responders can be notifies before a fire begins or actions can be taken to
lessen the extend and cost of damages if on does occur
6. Multiple buildings can be remotely managed by network because the sensors in a WSN
work together, producing data that shows real-time and historical maintenance reports
and service records, as well as comparisons among properties or units, floors, or
departments with a property.
Question 5
a) For each of the crimes listed below, (1) define the crime, and (2) give one physical
control an organization can apply to prevent the crime from being committed against it:
i. Counterfeiting/forgery
i. Defined:
1. Forgery – the act of creating or presenting false documents
or artwork as genuine in order to commit fraud
2. Counterfeiting – A form of forgery that involves privacy
duplicating a country’s currency or presenting it as genuine
with knowledge that it is not
ii. Physical control: Install detection devices
ii. Vandalism
i. Defined: Willful and malicious damage to or destruction of property
ii. Physical control: Install Security Cameras and CCTV Surveillance
of highly sensitive data storage areas
iii. Arson
i. Defined: Deliberate setting of fire to property for a malicious or
fraudulent intent
ii. Physical control: Properly organised physical and electronic
security measures including perimeter fencing, secret doors and
windows, and intruder alarm systems are essential to helping keep
a potential arsonist away
iv. Terrorism
i. Defined: Intentional misrepresentation to cause harm. Often an
underlying political agenda. Direct attack against a property or
deliberate contamination by chemical, biological, radioactive
materials or destruction of property by bombing
ii. Physical control: Limit access to computer equipment and
programs and the use if detection technologies such as camera or
drone surveillance, phone and internet monitoring, data mining etc.
v. Espionage.
i. Defined: The act of obtaining confidential information through
personal observation or mechanical, digital, or electronic
techniques that circumvent efforts to protect the information’s
ii. Physical control: CCTV Surveillance of highly sensitive data
storage areas
b) Aside from physical controls, most crimes against an organization can be prevented
through appropriate procedural and managerial controls. For each of the following
crimes, describe (1) two procedural controls and (2) two managerial controls:
i. Burglary
a) Two procedural controls
1. Requiring identification or passwords before access is granted
to an area
2. How particular tasks can be performed to make committing
more difficult, make detection faster and more certain
b) Two managerial controls
1. Continued evaluation and revision of risk control measures due
to constant evolution of threats.
2. Monitor security plan/ensure compliance with risk control
ii. Robbery
a) Two procedural controls
1. Requiring identification or passwords before access is granted
to an area
2. Systems to detect intrusion and theft of data
b) Two managerial controls
1. Continued evaluation and revision of risk control measures due
to constant evolution of threats.
2. Projecting a tough attitude towards crime to employees (and
through them to the public) can help an organisation avoid
becoming a target for criminals
iii. Shoplifting
a) Two procedural controls
1. Establish procedures to prevent employees from sneaking
merchandise out of the store at the end of their shifts
2. Screen present employees and job applicants for record of past
b) Two managerial controls
1. Policies and procedures - Inform employees about prosecution
2. Education - Recognize and reward employees who report
criminal activity or who suggest ways to deter or detect crimes
iv. Fraud
a) Two procedural controls
1. Regular audits to deter and discover fraud
2. Minimum two employees present prevent single employee from
defrauding others
b) Two managerial controls
1. Alert managers and employees who deal with the public to the
many possibilities for fraud
2. Bring criminal and civil charges against persons suspected of
v. Embezzlement.
a) Two procedural controls
1. Rotate employees among tasks for this same purpose
2. Regular audits to deter and discover embezzlement
b) Two managerial controls
1. Education - Recognize and reward employees who report
criminal activity or who suggest ways to deter or detect crimes
2. Application screening is to hire and retain a suitable,
trustworthy and competent workforce.it often provides the best
opportunity to reduce the crime threats posed by employees