Chapter 11: Risk Management

and Legal Liability

HOSP 110
Learning Objectives
 What is Risk Management?
Risk:
Potential for loss or damage.
Financial, property, injury to workers or guests
Risk management:
Practices, policies, procedures designed to
minimize or eliminate unacceptable risks.
A process of determining the exposure to risk
Then initiating action to either minimize or eliminate the risk.
 Why Practice Risk Management?
Two main reasons for T operators to practice risk
management:
1. To avoid injury to guests or employees;
2. To protect their business from financial or physical ruin.
A moral and ethical responsibility
Includes avoiding both emotional and physical harm.
Businesses protect against:
Damage to reputation;
Financial impacts from litigation
Operators demonstrate that they are prioritizing the health
and safety of individuals, while still taking steps to protect
the operational sustainability of the company.
 Risk Management
Reduces the likelihood of an unwanted and
unplanned event;
Reduces the consequences of the event;
Enhances your ability to access
comprehensive and cost-effective insurance.
 Risk management initiatives
Required by law and enforced by government
agencies:
Companies providing public transportation
Motor Vehicle Branch of government sets rules
and regulates the industry.
Tour bus accidents in BC:
What are the likely causes?
What are the possible consequences for the operator?
 Self-Regulation
If a guest is injured, and feels they have grounds
for a financial claim, they can sue.

Comply with statutory requirements, be sure to

self-monitor if standards they operate under are
acceptable to society and their peers.
Failure could mean large financial settlement with the
claimant.
Pay fines, be suspended from operation, be sued.
 Concepts of Risk
Real risk:
Actual statistical likelihood of an incident occurring.
Review statistics and relevant data, use an analysis
process, and/or use expertise in the field.
Perceived risk:
Perception of risk by those undertaking or evaluating
something
Inherent risk:
The risk that must exist for the activity to occur.
Operators take steps to minimize inherent risk.
Provide safety equipment; train staff; inform participants of the
hazards of the activity
 Case
CBC TV Marketplace risk management episode
on hang gliding in Florida.
 Risk Management Process
Risk identification:
On-site inspections and discussions with
management and staff;
Review of products, services, processes, and
contracts;
Review of historical activities and losses;
Identification of possible risk scenarios.
Contracts, negligence and tort law:
leave to law course
 Waivers
Waivers important in recreation, outdoor,
sport and adventure tourism.
They are an effective risk management tool.
Waiver is a contract that transfers acceptance
of the risk to the participants by requiring
them to acknowledge the risks present in the
activity.
 Sample Waiver
Valhallapow Powdercats.
 Four components of an effective waiver:

Clearly outline the risks in the activity and

voluntary acceptance of the risk;
Waiver of rights:
Waive the participants right to pursue legal action
against the operator in case of negligence;
Be short and easy to read, be easily recognized as
a legal document, include place for signature
Signed only by participants when they have been
given ample time to read and understand it well
in advance of the event or activity.
Case: Loychuk v. Cougar Mountain
Adventures Ltd.
All other topics for law course.
Exercises