Case City Bus

Risk Management at City Bus

City Bus Corporation provides school bus transportation to private and public schools in Lancaster County. City Bus owns 50 buses that are garaged in three different cities within the county. The firm faces competition from two larger bus companies that operate in the same area. Public school boards and private schools generally award contracts to the lowest bidder, but the level of service and overall performance are also considered.

a. Briefly describe the steps in the risk management process that should be followed by the risk manager of City Bus.

b. Describe several sources of funds for paying losses if retention is used in the risk management plan.

c. Identify other departments in City Bus that would also be involved in the risk management plan.

d. Identify ten major loss exposures faced by City Bus (use table below).

e. For each of the loss exposures identified in d., identify a risk management technique or combination of techniques that could be used to handle the exposure.

f. Provide examples or ideas for each technique(s). For example, if the risk is theft, technique is loss prevention, an example is a fence.

d. Risk (be specific) e. Technique(s) to Manage Risk f. Example

Example: Theft Loss prevention & insurance Install fence & purchase insurance

1. direct physical damage to a bus like fire Risk Financing (transfer of risk) Commercial property insurance policy. Place extinguishers in each bus.

2. collision Loss-prevention Take a safe-driving course

3. Suits for injuries to a children in an accident Loss reduction (loss-control) Defensive driving course

4. pour health of the driver Loss prevention Annual physical exam

5. fraud

6. robberies

7. bodily injury or property damage to others Loss-reduction (loss-control) Avoiding hiring drivers with poor driving records

8. driver may be injured in an accident Loss reduction (loss control) Workers compensation insurance

9....