What Are the Best Loss Prevention Tips?

Economic management terms refer to measures taken in advance to eliminate or reduce risk factors to reduce the frequency of losses.

Loss prevention

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Economic management terms that refer to measures taken in advance to eliminate or reduce

Loss prevention refers to measures taken in advance to eliminate or reduce

Where practicable, it must be removed from

The methods of loss prevention include engineering physics law, people behavior law and rules and procedures law. ^[2]

The difference between loss prevention and risk avoidance is that loss prevention does not eliminate the possibility of loss, while risk avoidance makes the probability of loss happen to be zero. There is also a difference between loss prevention and loss suppression: the focus of loss suppression is to reduce the degree of loss rather than the possibility of loss. In fact, a risk management plan often combines loss prevention and loss containment. For example, in the practice of business, the credit rating of customers is investigated and the credit limit is set. It can not only reduce the risk of bad debts due to poor customer creditworthiness, but also reduce the degree of loss of payment after the customer creditworthiness is in danger.

It is important to distinguish between risk avoidance, loss prevention , and loss containment. Risk avoidance eliminates all possible losses and can only be successfully applied in rare cases. When the risk avoidance completely eliminates the possibility of all losses, other risk processing technologies are no longer needed, so it is called a self-contained risk processing technology. And in the risk treatment, there are some other risk treatment plans and even further risk treatment techniques to reduce the possibility of loss, because some risks are unavoidable.

Distinguishing the difference between loss prevention and loss containment is key to improving risk management effectiveness. Because the purpose of loss prevention is to reduce the possibility of loss, the purpose of loss suppression is to reduce the degree of loss, so the choice of the two depends on the specific risk management purpose. If the purpose of management is to reduce the possibility of loss, loss prevention measures should be taken; if the purpose of risk management is to reduce the degree of loss, loss suppression measures should be taken. In more cases, loss prevention and loss mitigation measures are often used simultaneously in the risk management process. A risk management plan is often both a loss prevention plan and a loss containment plan, such as the investigation and evaluation of customer credit, the determination of credit limits, and the notarization or guarantee of customer contracts in customer relationship management. Many loss prevention measures are related to the factors that cause the loss to occur.