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# 4 Types of Risk Probability

, updated on January 15, 2023 A risk probability is the chance that a risk will occur. By definition, a risk is a probability of a loss. As such, risks are modeled with probabilities and impacts. The following are common ways to model risk probability.

## Qualitative Probabilities

In many cases, a risk probability is an educated guess that is modeled with a rating system such as low, medium and high probability. For example, a project team may identify risks and rate them according to the expert opinion of team members.

## Quantitative Probabilities

A detailed risk analysis may allow a number to be assigned to risk probabilities. These are typically a percentage such as 60% represented as 0.6.

## Discrete Probability Distributions

A single risk often has multiple probabilities associated with it. For example, a fire risk can range from a building completely burning down to minor damage. It is common to break out the probability of each level of impact as a discrete probability distribution that can be represented as a table of probabilities and impacts.

## Continuous Probability Distribution

A discrete probability distribution lists out a number of probabilities and associated impacts. For example, the chance of \$2000 and \$1000 fire damage might be listed in a table. A continuous probability distribution is a more accurate model that provides a probability for any impact such as the probability of \$1033.37 of damage. This is represented as a mathematical formula and smooth curve as opposed to a table and a bar chart.
 Overview: Risk Probability Type Risk Analysis Definition The chance that a risk will occur. Related Concepts

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