Avoidance
Generally accepted as the best form of risk control, avoidance reduces risk to zero probability by eliminating a specific risk factor completely. For example, the potential for workers compensation arising from vehicular incidents while shipping products is eliminated when using a third-party delivery service.
Loss Prevention
We can’t always avoid a risk completely so we make attempts to minimize it. A contractor has expensive equipment stored in his yard. There’s always a possibility of theft. By installing a security fence with a locking gate, the contractor reduces the risk of theft.
Loss Reduction
Loss reduction is a technique that minimizes the loss. For example, there is a risk of head injury at construction job sites so we wear helmets to reduce the risk of serious injury.
Separation
Usually this involves the dispersion of key assets. It is a technique that limits losses by confining catastrophic events to one location. For example, manufacturers produce in different locations so the business can survive a catastrophic loss at any one facility.
Duplication
In looking at ways to survive a serious loss, it’s usually good to have a back-up plan. Personally, we usually need an alternative form of transportation to get to work be it a second car or public transportation, etc. In business, we have a back-up server and cross-trained professionals should a primary piece of technology or primary employee fail.
Diversification
This risk control technique is often used by private investors. The more different types of investments an investor has, the less likely the investor will suffer great losses when any one should decline. The same principle exists in risk control for business. A multi-product manufacturer will be better prepared to survive a product recall event than a single product manufacturer.