Case Study of City Bus Corporation

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.

• Identify loss exposures: identify all major and minor loss exposures like property, liability, business income, crime, employee benefits, etc.

• Measure and analyze the loss exposures: it is important in order to manage them properly. This step requires an estimation of the frequency and severity of loss.

• Select the appropriate combination of techniques for treating the loss exposures. These techniques can be classified broadly as either risk control or risk financing

• Implement and monitor the risk management program: this step begins with a policy statement. This is necessary to have an effective risk management program. This statement outlines the risk management objectives of the firm, as well as company policy with respect to treatment of loss exposures.

b. Identify the major loss exposures faced by City Bus.

* Theft

* Direct physical damage to a bus like fire

* Collision

* Suits for injuries to a children in an accident

* Pour health of the driver

* Fraud

* Robberies

* Bodily injury or property damage to others

* Driver may be injured in an accident

* Bus can be damage (brake down)

* Legal expenses like payment of attorney fees

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

* Theft -Loss prevention & insurance

*...