A risk assessment is a process used to identify potential hazards and analyze what could happen if a disaster or hazard occurs. It is a systematic process performed by a competent person which involves identifying, analyzing, and controlling hazards and risks present in a given situation. The process determines possible mishaps, their likelihood and consequences, and the tolerances for such events. The results of this process may be expressed in a quantitative or qualitative fashion. Risk assessment is an inherent part of a broader risk management strategy to help reduce any potential risk-related consequences.
The risk assessment process involves identifying potential hazards and analyzing what could happen if a disaster or hazard occurs. There are numerous hazards to consider, and each hazard could have many possible scenarios happening within or because of it. As the risk assessment is conducted, vulnerabilities or weaknesses that could make a business more susceptible to damage from a hazard should be looked for. Vulnerabilities include deficiencies in building construction, process systems, security, protection systems, and loss prevention programs. They contribute to the severity of damage when an incident occurs.
Risk assessments can be done in individual cases, including in patient and physician interactions. In the narrow sense, chemical risk assessment is the assessment of a health risk in response to environmental exposures. Risk assessments are also used by criminal justice agencies to assess an individual’s risk of reoffending and identify areas for intervention. Risk assessments are used pretrial to inform decisions about release pending adjudication or jail detention, by correctional departments to determine the appropriate programming for incarcerated individuals, and by probation and parole departments to set the level of supervision.
The risk assessment process is usually conducted by the Chief Risk Officer (CRO) or a Chief Risk Manager in large enterprises. How a risk assessment is conducted varies widely depending on the risks unique to the type of business, the industry that business is in, and the compliance rules applied.
