Defining Risk Assessment Criteria

This chapter provides an overview of the concepts and applications of risk criteria used in operational risk assessments, and introduces the risk assessment criteria. Risk criteria are the established reference points against which the significance of risk is evaluated and measured. In general, risk criteria should include a risk scoring system that includes risk factors, defined scales of risk levels, and a risk matrix for an organization to measure risk for the purpose of prioritizing and making proper decisions. Much of the risk assessment criteria are related to defining the scoring or ranking of risk including the severity of consequences and likelihood of occurrence as part of the overall risk assessment process. The chapter describes how to select, develop and apply risk criteria, discuss risk reduction and the hierarchy of controls in risk estimation, and review acceptable risk level criteria. Risk is the product of a hazard's severity of consequence and it likelihood of occurrence.