Derisking

Risk is a function of loss severity and loss frequency. In fact, the risk manager’s equation is Risk = Probability x Consequence. Traditional risk management seeks to derisk by reducing the probability of loss, insuring against the loss, and transferring the risk to another organization. Insurance and transference do not make systems better. Reliability 4 Life derisks work systems by applying high reliability principles to reduce the frequency of the loss event AND applying resilience engineering principles to reduce the consequences of the loss. We derisk by making work systems more error resistant and more error tolerant, ie systems cause fewer errors and the fewer errors result in less harm.

We consult, train, and speak on derisking. Most clients seek to reduce loss events that our harm or injury. But safety is protecting anything of value. So many of our clients seek to derisk loss events in safety or quality or customer experience or workforce experience or efficiency. Insurance and transference are taxes paid on your cost of poor safety (COPS). Our reliability approach to derisking has the capability to reduce loss events by 80% in five years. Why pay when you can derisk with reliability?