How is risk determined

As the formula indicates, the higher the assessed probability of occurrence and severity of consequences, the greater the risk rating will be. Probability of occurrence explores the likelihood that an identified risk could occur. Probability of occurrence uses a rating and value scale ranging from Not Present 0 to Almost Certain to Certain 4.

The following Probability of Occurrence with Standard Linear Scaling chart includes a percent probability an issue will occur. Note: This chart is arbitrarily scaled 1 to 4, with 4 being the highest probability. Each rating is then assigned a value. The numerical values from the severity of consequences will contribute to other types of risk rating tools, like the hazard risk rating with standard linear scaling. This Severity of Consequences with Standard Linear Scaling chart assesses impacts to personnel safety, resources, work performance, property damage, and institutional reputation associated with each rating.

Note: This chart is arbitrarily scaled 1 to 4, with 4 being the highest severity. The primary goal of risk rating is to differentiate between an institution's high-risk activities and low-risk activities.

Therefore, it may be necessary to weight your consequences value scale to meet your institution's existing priorities and protocols. For example, using the standard linear scaling, an activity with a certain probability 4 with no risk 1 would produce an overall risk rating of 4. Fundamental to disaster preparedness and mitigation planning is an understanding of what to expect. This needs to be quantified, if only in a crude and approximate way, in terms of the degree of risk faced, the size of event that is likely, and the consequences of an event if it occurs.

The calculation of risk generally needs to consider several types of loss. The most common parameter of loss, and the one most easily dealt with, is economic cost.

Cost is widely used because many types of loss can be converted into economic cost. Effects which are considered in terms of economic costs are known as tangible losses.

But there are a range of other effects resulting from disasters which are important but which cannot be converted into a monetary equivalent, and these are referred to as intangible losses. A full consideration of risk would include a complete range of effects, both tangible and intangible, and of several qualitatively different types. The range of undesirable consequences of natural hazards what we might consider as loss parameters are listed in Table 1. Table 1 Loss parameters for risk analysis Losses Consequences Measure Tangible Intangible Deaths Number of people Loss of economically active individuals Social and psychological effects on remaining community Injuries Number and injury severity Medical treatment needs, temporary loss of economic activity by productive individuals Social and psychological.

Pain and recovery Physical damage Inventory of damaged elements, by number and damage level Replacement and repair cost Cultural losses Emergency operations Volume of manpower, man-days employed, equipment and resources expended for relief Mobilization costs, investment in preparedness capability Stress and overwork in relief participants Disruption to economy Number of working days lost, volume of production lost Value of lost production Opportunities, competitiveness, reputation Social disruption Number of displaced persons, homeless Temporary housing, relief, economic production Psychological, Social contacts, cohesion, community morale Environmental impact Scale and severity Clean-up costs, repair cost Consequences of poorer environment, health risks, risk of future disaster How is risk determined?

There are three essential components in the determination of risk, each of which should be separately quantified: a the hazard occurrence probability : the likelihood of experiencing any natural or technological hazard at a location or in a region b the elements at risk : identifying and making an inventory of people or buildings or other elements which would be affected by the hazard if it occurred, and where required, estimating their economic value c the vulnerability of the elements at risk : how damaged the buildings or injured the people or other elements would be if they experienced some level of hazard.

Figure There is a variety of methods of presenting the above information to illustrate the data describing risk. These can often be represented on a map. This is an essential tool in evaluating development projects because you can see if a project site is located in an area of high risk. An example of mapping is the Potential Loss Study. This consists of mapping the effect of expected hazard occurrence probability across a region or country.

It shows the location of communities likely to suffer heavy losses. This shows, for example, which towns or villages are likely to suffer highest losses, which should be priorities for loss-reduction programs, and which are likely to need most aid or rescue assistance in the event of a major disaster.

The following is an example of potential loss mapping. It presents risk as the levels of losses that would occur if a certain level of hazard were to occur at all the locations simultaneously.

In this case the type of loss plotted Map 4 is urban earthquake casualties in Turkey. Casualties are defined as those people whose houses are liable to be totally destroyed by the largest expected earthquake - a measure used because it has been found in Turkey to correlate closely with the numbers of killed and injured.

The potential loss plotted in each location is derived from three other types of geographically varying data, which are shown in Maps 1,2 and 3. See figure. Larger towns and dries are plotted individually, and are identified by circles whose area represents the population. The population in the smaller towns of 2, to 25, population is shown in the form of a population density.

The danger of a factory burning down, for example, is a clear threat to the future of any business. Other risks are more subtle, such as overly generous credit terms for customers, lax internal accounting controls or even a slight change in the market. The correct identification of risk is vital if the risk is to be mitigated. An event is only a risk if there is a degree of uncertainty associated with it. Let us consider a Project Management example to illustrate the point.

The value of money and therefore the cost of the project will change over the course of the project — through experience it is safe to say that this is certain.

But by how much — this is uncertain and therefore this is where the risk lies. It is important to remember that the assessment must take into account not only the current state of the workplace but any potential situations as well.

By determining the level of risk associated with the hazard, the employer, and the health and safety committee where appropriate , can decide whether a control program is required and to what level. See a sample risk assessment form. Overall, the goal is to find and record possible hazards that may be present in your workplace. It may help to work as a team and include both people familiar with the work area, as well as people who are not - this way you have both the experienced and fresh eye to conduct the inspection.

In either case, the person or team should be competent to carry out the assessment and have good knowledge about the hazard being assessed, any situations that might likely occur, and protective measures appropriate to that hazard or risk.

Each hazard should be studied to determine its' level of risk. To research the hazard, you can look at:. Ranking or prioritizing hazards is one way to help determine which risk is the most serious and thus which to control first. Priority is usually established by taking into account the employee exposure and the potential for incident, injury or illness. By assigning a priority to the risks, you are creating a ranking or an action list.

There is no one simple or single way to determine the level of risk. Nor will a single technique apply in all situations.

The organization has to determine which technique will work best for each situation. Ranking hazards requires the knowledge of the workplace activities, urgency of situations, and most importantly, objective judgement. For simple or less complex situations, an assessment can literally be a discussion or brainstorming session based on knowledge and experience.

In some cases, checklists or a probability matrix can be helpful. For more complex situations, a team of knowledgeable personnel who are familiar with the work is usually necessary. As an example, consider this simple risk matrix. Table 1 shows the relationship between probability and severity.

Let's use an example: When painting a room, a step stool must be used to reach higher areas. The individual will not be standing higher than 1 metre 3 feet at any time. The assessment team reviewed the situation and agrees that working from a step stool at 1 m is likely to:.

The workplace decides to implement risk control measures, including the use of a stool with a large top that will allow the individual to maintain stability when standing on the stool. They also determined that while the floor surface is flat, they provided training to the individual on the importance of making sure the stool's legs always rest on the flat surface.

The training also included steps to avoid excess reaching while painting. Once you have established the priorities, the organization can decide on ways to control each specific hazard. Hazard control methods are often grouped into the following categories:. It is important to know if your risk assessment was complete and accurate. It is also essential to be sure that any changes in the workplace have not introduced new hazards or changed hazards that were once ranked as lower priority to a higher priority.

It is good practice to review your assessment on a regular basis to make sure your control methods are effective. Keeping records of your assessment and any control actions taken is very important. You may be required to store assessments for a specific number of years.

Check for local requirements in your jurisdiction.