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Significance of Risk Management Plan
A risk management pan is document that lays out the risks and what effect they could have if they occur and comes up with ways to mitigate the risks. The risk management plan should be checked regularly so as to ensure that new risks are captured in the document. A risk management plan involves various steps. The first step is to identify the potential risk and then analyze the effect of the risk on the organization and evaluate the risk . You then deal with the risk and the last step is to observe and readjust the risk plan. Risk management as several components such as define the risk, come up with assumptions regarding the risks, coming up with structures , risk probability assessment,cost implication , scheduling and noting down the risks in order of impact. This article will highlight the benefits of a risk management plan for organizations.
The risk management plan assists organizations identify risks that might not be easily seen. The risk management team makes sure that they carryout a complete investigation of potential risks in an organization. This enables risks that are not obvious to be identified. This will help the organization deal with all the risks in a timely and effective manner saving the organization cost.
The organization is able to defend itself against possible cases using the risk management plans. Organisations are always at the risk of being sued by various parties for various reasons that are not always seen by the organization before they happen. A thorough risk management plan will protect the organization from such lawsuits saving money and reputation of the organization.
A risk management plan assist in recognizing and taking control of work hazards. As the organization is coming up with the risk management plan it is able to identify work place hazards. It also lays down the control measures on how to deal with the hazards before they occur. This will help the organization avoid accidents in the work place and ensures a safe working environment.
Risk management plan will involve a risk analysis that will help the organisation create awareness of risks to their employees. This plan ensures that all employees are aware of the risks that could affect them in the course of them doing their job. The risk management plan is also used as a training tool for employees on how to avoid the said risks. This ensure that employees know how to protect themselves from the risks.
The risk management plan gives the standards that are accepted by the law in managing risk. This will help the organization in ensuring it follows the law to the letter and void being sued. An organization could be closed down due to failure to follow the law.

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