Risk Management is the process used to identify, assess and prioritize risks in business. Upon identification of the risks, a plan is developed which will minimize or even eliminate the impact of a negative event, should it happen.
Business risks run the gamut, from accidents on the factory floor, to fires and natural disasters such as floods or tornados. Risks also include legalities such as theft, sexual harassment lawsuits and fraud. Another area that poses risks are business practices which may not properly provide contingencies for project failures, financial uncertainties, or the storage and transfer of data and records.
Risk management focuses on maintaining an organizations viability and reducing financial exposure, while also encompassing the preservation of the company’s physical facility, data, records and any assets used in the day to day operation.
A comprehensive risk management analysis focuses on the strategies that must be employed depending on all liabilities, and their potential impacts. As a result, there are often many variations in the different detailed plans designed to protect the company’s people and property.