Exhibit 3. 1 Steps in the risk Management process Identify loss exposures Analyze the loss exposures Select the appropriate techniques for treating the loss exposures 1. Risk control Avoidance Loss prevention · Loss reduction 2. Risk financing Retention Noninsurance transfers Implement and monitor the risk management program 3-6
3-6 Exhibit 3.1 Steps in the Risk Management Process
Identifying Loss EXposures (1)Property loss exposures (2)Liability loss exposures (3 Business income loss exposures (4)Human resources loss exposures (5) Crime loss exposures (6 Employee benefit loss exposures (7 Foreign loss exposures 8)Market reputation and public image of company 9)Failure to comply with government rules and regulations 3-7
3-7 Identifying Loss Exposures • (1) Property loss exposures • (2) Liability loss exposures • (3) Business income loss exposures • (4) Human resources loss exposures • (5) Crime loss exposures • (6) Employee benefit loss exposures • (7) Foreign loss exposures • (8) Market reputation and public image of company • (9) Failure to comply with government rules and regulations
Important Loss Exposures: I Property loss exposures Building, plants, other structures Furniture, equipment, supplies Electronic data processing(EDP) equipment computer software Inventory Accounts receivable, valuable papers and records Company planes, boats, mobile equipment 3-8
3-8 Important Loss Exposures: I • Property loss exposures • Building, plants, other structures • Furniture, equipment, supplies • Electronic data processing (EDP) equipment; computer software • Inventory • Accounts receivable, valuable papers and records • Company planes, boats, mobile equipment
Important Loss Exposures: Il Liability loss exposures Defective products Environmental pollution (land, water, air, noise Sexual harassment of employees discrimination against employees, wrongful termination Liability arising from company vehicles Misuse of the Internet and e-mail transmissions transmission of porno material Directors and officers liability suits InherentVirtue or Inevitable Evil: The Effects of Directorsand Officers'Ins urance on Firm Value, Derrick WH Eung and Jason.H Yeh, 03 September2018,https:lldoiorg/10.1111/mir12104 3-9
3-9 Important Loss Exposures: II • Liability loss exposures • Defective products • Environmental pollution (land, water, air, noise) • Sexual harassment of employees, discrimination against employees, wrongful termination • Liability arising from company vehicles • Misuse of the Internet and e-mail transmissions, transmission of porno material • Directors’ and officers' liability suits – Inherent Virtue or Inevitable Evil: The Effects of Directors' and Officers' Insurance on Firm Value, Derrick W. H. Fung and Jason J. H. Yeh, 03 September 2018, https://doi.org/10.1111/rmir.12104
Important Loss Exposures: III Business income loss exposure Loss of income from a covered loss Continuing expenses after a loss EXtra expenses Contingent business income losses 3-10
3-10 Important Loss Exposures: III • Business income loss exposure • Loss of income from a covered loss • Continuing expenses after a loss • Extra expenses • Contingent business income losses