Chapter 8 Environmental Risk
Chapter 9 Crime and Cyber Risk
Chapter 10 Fleet Risk
Chapter 11 Smart Products and Risk Management
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 occurring.
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 controlled.
Vehicles – can be controlled by the selection of task-appropriate vehicle for purchase, the establishment of safe operating practices, and vehicle maintenance and replacement.
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 produced:
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 recovery
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.
Answer: 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 each.
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 media.
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 organization
2. Negative information –true, false, misinterpreted, out of context - can reverse positive image and damage reputation very quickly
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 confidentiality 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. ii. Robbery
2. Monitor security plan/ensure compliance with risk control measures 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 shoplifting b) Two managerial controls
1. Policies and procedures - Inform employees about prosecution activities
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 fraud 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