Please read carefully if you really want to understand the definition of risk. The word risk is very common for all of us and we use it frequently in our life. You may have heard many times someone saying ” I can not take risk to go out in bad weather ” and everybody understands what does that mean. We understand that going out in bad weather may cause some harm or damage to a person or his belongings.
Why? This understanding is based upon some past facts and our observations that some one went out and he was harmed due to slippery conditions or flooding at the road or his cell phone got dead due to rain water. If we were not aware of any such event or negative impact of raining or bad weather we have never said that it was risky to go out in bad weather.
If we switch on our TV and hear every day about one or two fatal accidents due to slippery roads in rainy season, we will say ” It is very risky to go out” but if we don’t know about these accidents we may not think about it although the high risk is still there.
I just wanted to give you some thought, here is my definition of risk which I understood from my life experiences:
Risk is the combination of probability and severity of occurrence of any kind of loss or damage or unwanted outcome. Remember the risk is potential that an unwanted event can occur.
The process of measuring the impact of a risk is called the risk assessment process in which the severity and probability of a risk is computed and a net value is established which further declares a risk is high, moderate or negligible. Here is an example how we do a risk assessment in common scenarios.
Risk Assessment Example
Situation 1: If I put my iPhone on my office table close to the edge most probably it will fell down with a little carelessness and will be broken so the probability of falling is high since it is close to the edge and severity (of damage) is also high since falling from table height will break it.
Situation 2: Now if I move it to the center of the table the probability of falling is less as compared to placing it near the edge but the severity of damage is same.
The risk of damage of my iPhone is high in first situation as compared to the later one.
I don’t want to put you in complex definitions of risk so that you become more confused this was the simple way I could explain, you can read our other articles on this subject and on hazards, impacts, aspects, risk assessment and risk analysis etc.