Hospitality Law and Risk Management

Multiple Choice

1. Risk Managementis:
   1. The identification, analysis, assessment, control, avoidance, minimization and/or elimination of unacceptablerisks
   2. A waste of time because there are too many risks
   3. Generally carried out at the Board level where decisions are made
   4. Best managed reactively
2. Insuranceis:
   1. Relatively inexpensive in relation to other risk managementtools
   2. A form of riskmanagement
   3. Too expensive in mostcases
   4. Primarily used to cover losses on homes andautomobiles
3. An Insureris:
   1. Also known as a PolicyHolder
   2. A company sellinginsurance
   3. Required by law to disclose all exposures to risk when acquiring coverage
   4. A rating factor used to calculate apremium
4. Principle ofInsurance
   1. Insurance can be purchased to cover just about anyloss
   2. Insurance is foreveryone
   3. Involves pooling funds from many insured entities to pay for the losses of afew
   4. Includes fire, wind, acts of terrorism and AllPerils

1. In order to insuresomething:
   1. You have to have an insurableinterest
   2. You have to be able to cover the premium andclaims
   3. You have to mitigate thedeductible
   4. You have to have had no previous losses in similar types ofclaims
2. Utmost goodfaith:
   1. Encourages the idea that most claims won't happen if we believe theywon't
   2. The highest level of faith that one can aspireto
   3. Is based on an accurate calculation of an insurancepremium
   4. Material facts must bedisclosed
3. 4 steps in RiskManagement
   1. Identification, Analysis, Removal andTreatment
   2. Identification, Analysis, Control andTreatment
   3. Identification, Analysis, Control andExclusion
   4. Handle, Remove, Assert andProving
4. Risk Exposure in the Hospitality IndustryIncludes:
   1. Financial, Service Providers,Experience
   2. All risks identified during businessdevelopment
   3. Financial, Courtesy Transportation, Transfer to Third Parties,Access for thedisabled
   4. Is part of all Commercial General Liabilitycontracts
5. First stage of RiskManagement is
   1. Removal of all unacceptablerisks
   2. Treatment
   3. Control
   4. Identification

1. Who should be involved in identifyingRisks?
   1. Management
   2. Owners
   3. Staff
   4. All of theAbove
2. The Delphi Techniqueincludes:
   1. Brainstormingexercises
   2. Is a technique used to achieve a consensus ofexperts
   3. All staff contributing to asolution
   4. None of the above 12.SWOT Analysisis:
3. Analysis of an organizations Strengths, Weaknesses, Opportunities andThreats
4. Analysis of an organizations Stress, Weaknesses, Origins andTerms
5. Analysis of an organizations Stress, Weaknesses, Origins andThreats
6. Analysis of an organizations Structure, Weaknesses, Origins and Terms
7. After Risks have beenidentified
   1. Your job isdone
   2. A report to supervisors and management ends theprocess
   3. Dangers are all butmitigated
   4. They need to be analyzed to determine theirimpact and consequences if they did occur

1. RiskManagement:
   1. Guarantees that any potential losses areavoided
   2. Is the first rule of insurancecoverage
   3. Ensures that an organization identifies and understands the risks to which it isexposed
   4. None of theabove
2. Having a clear understanding of allrisks:
   1. Guarantees that risks will behandled
   2. Provides insurers with utmost goodfaith
   3. Allows an organization to measure and prioritizethem
   4. None of the above 17.
   6. Two types of analysisare:
3. Qualitative and Quantitativeanalysis
4. Limited and Broadanalysis
5. Qualitative and Quasitativeanalysis
6. Rating and Probability analysis 18. Options for Risk Responseinclude:
7. Eliminate, Cause, Assign andPassive
8. Avoid, Mitigate, Transfer andAccept
9. Declare, Cause, Pawn andImpact
10. Avoid, Manage, Transition andAccept
11. In a Corporate environment, the Board ofDirectors
    1. Leaves all of the responsibility for Risk Management tostaff
    2. Is responsible for ensuring the company has an adequate and effective risk managementsystem
    3. Is a lameduck
    4. Only approves thesystem
12. Educationis:
    1. The process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs andhabits
    2. The process of facilitatinghabits
    3. Generally established during the Identificationphase
    4. None of theabove

Short Answer (16 Marks):

Name and Describe the4 Stepsused in theModel for Management

Step	Description
1.
2.
3.
4.

True and False Circle:

An effective risk management plan eliminates all risks	True	False
An effective risk management plan makes your business a better risk to insure	True	False
Risk management plans guarantee that you will expose and eliminate every potential risk	True	False
Insurance is a risk financing tool	True	False
Purchasing insurance is the only task associated with risk Management	True	False
Reputation is a risk exposure for businesses	True	False
Having a clear understanding of their risk exposures allows an organization to measure and prioritize them and take the appropriate action to reduce potential losses	True	False
Organizations and individuals are held to a very high duty of care	True	False
Risk management provides a clear and structured approach to Identifying and analyzing risks	True	False
A benefit of Risk Management is protecting people from harm	True	False
2 Types of risk analysis are Qualitative and Speculative	True	False
4 Risk responses are Avoid, Mitigate, Transfer and Accept	True	False
A benefit of Risk Management is Standardization of Process and Procedure	True	False
A Policy Manual is the documentation that defines and clarifies and organizations policies and procedures	True	False
A Policy manual can be internal policies/procedures or they can be publications created by bodies that create our duty of care	True	False
A swimlane diagram is a visual element used to train highly effective Athletes	True	False

Long Answer

describe what Risk Management is and why it is important

1. Name 20 Actors that are involved in Alcohol Risk at our resort (at least 5 must be policies/best practices)

1. Name 20 Actors that are involved in Food Handling Risk at our resort (at least 5 must be policies/best practices) ?

1. Name and briefly describe 5 policies/best practices that would be important for Hotel Operations at our resort to implement and maintain in a policy manual?

1. Name and briefly describe 5 policies/best practices that would be shared between Hotel Operations and Food Service

1. Why is it important to identify Authorities when we are creating policies and what is the best practice when including an Authorities legislation/rules/website in our policy?

1. Name 5 (15 marks)

1. Human Resource Policies, Procedures or Best Practices
2. Operational Policies, Procedures or Best Practices
3. Financial Policies, Procedures or Best Practices

1. Name the 4 methods of Risk Response and give 3 Examples of each

1. Name 5 Benefits off Education and Training for your Employees

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