Loss Reduction

Management methods used to limit the extent of losses when they do happen. Practicing strict legal compliance with all environmental laws and safety procedures as well as maintaining good public relations is extremely important in managing loss reduction when unfortunate situations develop.

Risk management control procedure that emphasizes safety management. Its purpose is to reduce the frequency and severity of potential losses. Business firms apply this procedure by posting safety signs, holding safety meetings, and providing cash awards for employees with the best safety records. See also Engineering Approach; Human Approach.