The assessed probably and severity of a hazard is referred to as risk assessment. This is one of the most important steps in the management procedure. It involves the determination of qualitative and quantitative risk as well as the recognized threats which are referred to as hazards.
Risk management is important in all processes not just in the CRM function. It is always best to do some kind of assessment when dealing with a severe loss or damage to life.
- Industries such as engineering have all developed complex systems for risk assessment. This is especially important when the work done may incur harm to life forms or result in financial or asset loss. Other industries that make use of sophisticated risk assessment systems are aerospace, nuclear, rank, oil, and military. The hospital, medical, as well as food industries also regularly make use of their own risk assessment strategies on a regular basis.
- There are many forms of risk assessment which can be used and they may also differ greatly from one industry to the other.
- The evaluation of risk involves the evaluations, assumptions, and uncertainties and makes sure that they are all well defined and clearly presented. The challenge with risk assessment lies in the fact that measuring both quantities of risk which are the possible losses and the possible occurrences are clearly defined, and this can prove to be quite difficult to measure.
- There is a large margin of error when measuring these two factors. Two situations may occur: Risks with a low probably of occurring and a large potential loss, although another scenario is a high likelihood of occurring with a low potential of loss. However, both scenarios should be treated with an almost equal priority as they can both easily happen.
- Treating both situations as equal can also prove to be challenging when resources are limited especially when time is constrained in order to do the whole evaluation process.
Risk management is important in all processes not just in the CRM function. It is always best to do some kind of assessment when dealing with a severe loss or damage to life.
