Answer 1- Direct losses the bank experienced
The bank’s IT such as information about client record and business data, the bank‘s furniture, computers, and other equipments. The bank can sue the building owner for leasing unsafe premises because the owner declared too expensive to repair the building and building is very tall tower.
2- Indirect cost : the bank could not use the building, the bank inabilty to hold needed conferences and meetings there is a business loss and income loss,key employee loss, loss of costumer, the bank has expenses to recover office and business. The shuttle service cost for the bank.
3- In a maximum probable loss event arising from a tornado, identify the additional losses that you would expect.
After the tornado damaged, the bank’s employees and ...view middle of the document...
I believe training can reduce the cost. Such training for an earthquake San Francisco, earthquake training is given in the high school and elementary schools. Disability or temporary damaged would be happened in the building.
4. How could the bank’s risk manager use each of the following risk management tools in this case?
a. Risk assumption: The bank mightn’t have been established a risk management department. They would not have considered huge potential losses for the bank that makes the bank has more losses. They would not want to consider any huge losses come from a Tornado. The bank must establish a cash fund that it can use when losses occur. This funding may supplement a plan to finance small losses from current cash flow.
b. Loss Prevention: the bank can rent an office space in a more secure building, they can make the office more secure equipment if the bank wants more effective the loss prevention they should meet safety requirements. They can train their employees.
c. Loss Reduction: The bank can back up data and important files. The bank built emergency doors, the employees should ready for transfer a new location
d. Insurance: Insurance should cover all the building and cover the loss of use of the property, and cover for workers’ compensation claims; insurance should provide returning the building in the same shape received at the beginning of the lease. But, risk manager must make sure the company does not violate any of the terms of the insurance agreement.
e. Risk transfer: the bank can use risk transfer for many contracts or leases. The risk manager should make sure everything written down who is going to accountable for the damage and following recovery for damage. Also, damaged should have been transferred to the landlord and this should have written down in the contract.