What is risk management and how should districts address insurable risks?

• A. Risk management means accepting all risks without mitigation.
• B. Identify, analyze, and mitigate risks; districts address insurable risks through insurance, safety programs, and risk assessments.
• C. Risk management is the same as budgeting.
• D. Risk management is not applicable to school districts.

Answer: (B)

Risk management is about proactively handling uncertainties that could disrupt a district’s ability to meet its goals. It involves identifying potential risks, analyzing how likely they are to occur and how big their impact would be, prioritizing them, and putting in place controls or actions to reduce either the chance of an event happening or the damage it would cause. When dealing with insurable risks, districts typically mix insurance to transfer financial losses, safety programs and training to prevent incidents, and ongoing risk assessments to uncover new exposures and adjust protections accordingly. This approach protects assets, students, staff, and operations, and supports financially sound planning. It isn’t just budgeting or an excuse to accept risks, and it applies to districts of all sizes.