Which risk control method has the objective of reducing the severity of losses once they have occurred?

Which risk control method has the objective of reducing the severity of losses once they have occurred?

• A. Loss prevention
• B. Loss reduction
• C. Risk avoidance
• D. Risk transfer

Answer: (B)

Loss reduction focuses on lessening the impact after a loss has occurred. It involves measures that limit damage, shorten downtime, and reduce the financial and operational consequences once an incident happens. In aviation risk management, examples include fire suppression systems, redundant critical systems, crashworthy design features, and well-practiced emergency response and recovery procedures. These actions aim to keep a claim from becoming a catastrophic loss. In contrast, loss prevention tries to stop incidents from happening in the first place, risk avoidance means staying away from the risk altogether, and risk transfer shifts the financial burden to someone else (like insurance) rather than reducing the damage itself. So the objective of reducing the severity after a loss occurs is loss reduction.

Loss reduction focuses on lessening the impact after a loss has occurred. It involves measures that limit damage, shorten downtime, and reduce the financial and operational consequences once an incident happens. In aviation risk management, examples include fire suppression systems, redundant critical systems, crashworthy design features, and well-practiced emergency response and recovery procedures. These actions aim to keep a claim from becoming a catastrophic loss. In contrast, loss prevention tries to stop incidents from happening in the first place, risk avoidance means staying away from the risk altogether, and risk transfer shifts the financial burden to someone else (like insurance) rather than reducing the damage itself. So the objective of reducing the severity after a loss occurs is loss reduction.