encyclopedia

RISK

An expression of possible loss over a specific period of time or number of operational cycles. It may be indicated in terms of hazard severity and probability.

RISK ALLOCATION

The distribution of engineering risk among the various participants in a project.

RISK ANALYSIS

1. Measuring the probability of risk events. 2. Measuring the probability and consequences of risk events and estimating their implications.

RISK ASSESSMENT

A component of risk management that uses risk event identification and risk analysis in support of risk allocation.

RISK AVERSION

A concept in economies, finance, and psychology related to the behavior of individuals or organizations under uncertainty. Risk aversion is the reluctance to accept an option with an uncertain payoff rather than another option with more certain, but possibly lower,…

RISK EVENT

An uncertain event or condition that has negative (or positive) consequences if it occurs.

RISK MANAGEMENT

An element of the systems safety management function that evaluates the safety effects of potential hazards and considers acceptance, control, or elimination of such hazards with respect to expenditure of resources.

RISK NEUTRAL

An adjective that describes a behavior that is in between risk averse and risk seeking.

RISK REDUCTION

All techniques that are designed to reduce the likelihood of loss, or the potential severity of those losses that do occur.

RISK TOLERANCE

The degree of uncertainty that an individual or organization is willing to accept. The inverse of a person’s risk aversion is sometimes called his or her risk tolerance.