A-Z Popular Blog Risk Search »

4 Types of Risk Probability

 , updated on January 14, 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
TypeRisk Analysis
DefinitionThe chance that a risk will occur.
Related ConceptsRisk Identification
Risk Analysis
Risk Management
Risk Reduction
Risk Value
Probability-Impact Matrix
Risk Impact

Risk Management

This is the complete list of articles we have written about risk management.
Acceptable Risk
Business As Usual
Business Impact
Business Risks
Calculated Risk
Cascading Failure
Contingency Plan
Contingency Planning
Disaster Preparedness
Dread Risks
Economic Risk
Financial Risk
Innovation Risk
Investing Risk
Plan Template
Political Risk
Positive Risk
Project Risk
Reputational Risk
Residual Risk
Resource Risk
Risk Acceptance
Risk Analysis
Risk Appetite
Risk Awareness
Risk Capacity
Risk Communication
Risk Contingency
Risk Control
Risk Culture
Risk Estimates
Risk Evaluation
Risk Exposure
Risk Impact
Risk Intelligence
Risk Management
Risk Matrix
Risk Measurement
Risk Mitigation
Risk Monitoring
Risk Objectives
Risk Prevention
Risk Probability
Risk Profile
Risk Reduction
Risk Register
Risk Response
Risk Sharing
Risk Taking
Risk Tolerance
Risk Treatment
Risk Trigger
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Special Risks
Strategy Risk
Tactical Risk
Technology Risk
Unknown Risks
Upside Risk
More ...
If you enjoyed this page, please consider bookmarking Simplicable.

Risk Analysis

A complete guide to risk analysis.

Qualitative Risk Analysis

A definition of qualitative risk analysis with an example.

Cost Of Risk

A definition of cost of risk with examples.

Risk Perception

A definition of risk perception with examples.

Risk vs Hazard

The difference between a risk and a hazard with examples.

Swot Threats

An overview of threats for SWOT analysis with examples.

What-if Analysis

The definition of what-if analysis with examples.

External Factors

A list of common external factors.

Risk Exposure

A definition of risk exposure with example calculations.

Risk Management

An overview of the risk management process.

Cascading Failure vs Resilience

An overview of cascading failure and resilience.

Business As Usual

An overview of business as usual.

Risk Mitigation

A list of techniques for reducing risk.

Risk Mitigation vs Risk Reduction

The difference between risk mitigation and risk reduction.

Risk Control

A list of common risk controls.

Risk Value

A definition of risk value with example calculation.

Risk Impact

The common types of risk impact.

Risk Communication

A definition of risk communication with examples.

Risk Management Process

Overview of the steps in a risk management process.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map