Risk Management in a Pandemic
This year, we’ve all been facing risk every single day. SARS-CoV-2 (the virus that causes COVID-19) is a constant risk in our lives right now. Every day we exist in this world, we have to think about how we’ll manage the risk of catching SARS-CoV-2 while also living our lives.
Since this risk is so in our faces right now, I thought it’d be fun to talk about risk control using the pandemic as our example. So let’s dive in!
The 4 Risk Controls
When learning about risk management, I was taught there are 4 ways to deal with it.
You can:
What’s important to remember is these controls are not mutually exclusive. You can do one of them, all of them, or somewhere in between. If you’re like me, chances are you’re doing a bit of each.
Let’s talk about what each one of them means when it comes to a global pandemic.
Avoiding Risk
I’ve been really lucky in that I’ve been able to avoid the risk of catching SARS-CoV-2 this year (I think).
If you’re like me and you’ve stayed home as much as you possibly can, you’ve been avoiding the risk. This is a completely valid option (if you’re lucky enough to have it) with definite upsides, if you can deal with the downsides (social isolation and the risks associated with that).
If you can choose to stay home without being too negatively impacted, that’s a great option. I definitely know people who have done this.
Ultimately, I’ve found that I can only do this up to a point. So while avoiding the risk of catching SARS-CoV-2 is part of my strategy, it’s not the only control I use.
Transferring Risk
Usually when you hear about risk transference, people are talking about insurance. You pay the insurance company to take on part, or all, of the financial risk. In this pandemic, that’s still a wise choice to do if you can. If you can pay for health, life, and/or long-term care insurance that could help reduce or prevent financial impacts caused by COVID-19.
There’s another way of transferring risk I’ve been doing the past 6 months or so - paying someone else to shop for my groceries. At my local grocery store, I can order online and someone else will shop for me. I still have to drive to the store and they’ll load the groceries in my car. This severely limits my exposure while transferring that risk to the shoppers. Anyone who is paying someone else to purchase and deliver their goods is transferring that risk.
Ethically, there are definitely pros and cons.
Do I think anyone should have to physically interact if they don’t want to - especially when faced with the real risk of contracting COVID-19? No. Do I understand the limitations of our capitalistic economy and the ramifications of my participation within it? Somewhat, yes.
I understand that I am essentially paying someone else to take on the risk that I am not willing to. Are they willing to do it? I don’t know. Is it still wrong because given other choices they wouldn’t take on my risk? Probably.
I also understand that my exposure to others drastically decreases by doing this. If many others did it, there would be far fewer people in the store thus making it safer for everyone there. Do I point this out to justify my actions? Absolutely.
I honestly don’t know if this is a morally good action or not. What I do know is it’s a perfect example of risk transference.
Mitigating Risk
Mitigation is an idea most of us are familiar with - wearing masks, limiting outings, keeping your distance from people, etc.
This is probably the most common control people are using. It’s one I’m definitely trying to do. After you stay at home for months on end, you start to evaluate the inherent risks associated with venturing out and how you can mitigate them.
Our economy, at least until this virus is under control, relies heavily on mitigation techniques. So many businesses rely on in-person customers. If we couldn’t effectively mitigate this virus, we would have to rely on extreme measures such as shutdowns, which we personally have dealt with in our state.
I think it’s safe to say no one wants that, but many also refuse to mitigate the risk - at least well enough to keep this virus under control. This is especially true as pandemic fatigue sets in and we become comfortable taking more and more risks, myself included.
It’s tricky, but that’s one of the downsides of a previously unknown risk that shows up and throws your world in chaos!
Accepting Risk
This is the inevitable option many of us choose at some point.
If you will go hungry without physically shopping for food yourself, you’ll probably try to mitigate the risk but ultimately accept some level of risk as you venture outside your home.
If you think masks are ineffective at stopping the virus, you might accept any accordant risk that comes with going about maskless (including the social stigma, possibly infecting others, and potential punishments).
If you decide you’ve stayed at home for 7+ months and done everything else right, but you really want to see your family for Thanksgiving, you might decide to accept that risk and do it.
We all have our reasons. Considering our economy is structured for mostly in-person interactions, most if not all of us have to deal with accepting at least some risk at some point.
So, you could argue that this control would only be used when none of the other controls are acceptable options. Like, if you can’t avoid the risk, can’t transfer it, and can’t (or don’t want to) mitigate it, then you accept it. I disagree though.
I think when it comes to managing risk, we all use at least a few of these options, if not all of them, to deal with it. And if the current social climate is any indication, we all disagree on what controls can or should be used.
Wrap It Up
I have no idea what you should do to manage the risk of COVID-19. What I do know is that it was fun to think through risk management controls I learned in college and apply them to a terrifying global pandemic. Who knew a business degree could be relevant to real life?
Whether we like it or not, we all deal with risk management and especially so right now. We might try to avoid it by staying home where we can control everything. We might pay someone else to take on those risks. We might wear a mask and socially distance. We might accept the potential consequences and do nothing, or do what we can and accept it will never be enough to fully control what might happen to us or our loved ones. But I guarantee you, all of us are doing something to deal with the new, very real risk infecting our lives.