A-Z Popular Blog Risk Search »
Risk
 Advertisements
Related Guides
Risks

Risk Probability vs Risk Impact

 , updated on
Risk probability is the chance of a risk occurring.
Risk impact is the cost of a risk if it does occur.

Risk Probability vs Risk Impact

Risk probability and impact are two parameters that are commonly used to model risk. The following example illustrates the risks associated with giving a toddler a big cookie.
Risks of Giving a Toddler a Big Cookie
Risk
Probability
Impact
Drops cookie on floor
5%
Need to replace cookie and vacuum
Gets crumbs on floor
20%
Need to vacuum
Risks may be modeled with a probability-impact matrix like the table above or a probability distribution that represents probability-to-impact as a curve. For example, an automobile may incur damage anywhere from a $100 small scratch up to a total write off with each level of loss having a different probability of occurring.
Risk Probability vs Risk Impact
Risk Probability
Risk Impact
Definition
The chance that a risk will occur.
The cost when a risk does occur.

Risks

This is the complete list of articles we have written about risks.
Accept
AI Risk
Risk Avoidance
Bankability
Brand Risk
Budget Risk
Business Risks
Change Risk
Competition
Compliance Risk
Concentration Risk
Cost Risk
Country Risk
Credit Risk
Demand Risk
Dread Risk
Economic Risk
Exchange Rates
Existential Risk
External Risk
Financial Risk
Force Majeure
Good Risk
Hazards
Human Error
Risk Identification
Infinite Risk
Inflation Risk
Inherent Risk
Innovation
Interest Rates
Internal Risks
Investing Risk
Legal Risk
Liquidity Risk
Model Risk
Moment Of Risk
Natural Disasters
Negative Risk
Operations Risk
Passive Risk
Personal Risk
Political Risk
Process Risk
Procurement Risk
Product Risk
Project Risk
Pure Risk
Quality Risk
Recession Risk
Risk Mitigation
Refinancing Risk
Regulatory Risk
Reputational Risk
Residual Risk
Resource Risk
Revenue Risk
Risk Appetite
Risk Aversion
Risk Examples
Risk Management
Risk Management Process
Risk Matrix
Risk Meaning
Risk Measurement
Risk Taking
Risk Tolerance
Risk Triggers
Risk vs Issue
Risk vs Opportunity
Risk vs Uncertainty
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Security Risk
Settlement Risk
Risk Sharing
Speculative Risk
Strategic Risk
Strategy Risk
Supply Risk
Systemic Risk
Tactical Risk
Taxation Risk
Technology Risk
Risk Transfer
Uncertainty
Unforced Error
Unknowns
Upside Risk
Weather
If you enjoyed this page, please consider bookmarking Simplicable.
 

Risk Probability

The common ways to model risk probability.

Business Risks

A list of common business risks.

Risk Treatment

The five things that can be done about risk.

Risk Mitigation

A list of techniques for reducing risk.

Positive Risk

The potential that you'll achieve too much of a good thing.

Dread Risk

Any risk that people have a strong aversion too.

Risk vs Opportunity

The surprising similarities between risk and opportunity.

Risk Management vs Contingency Planning

The difference between risk management and contingency planning.

Uncertainty

The common types of uncertainty in decision making and strategy.

Inventory Risk

The common types of inventory risk.

Business Risk Management

An overview of common business risk management techniques.

Risk Identification

The basics of risk identification.

Risk Intelligence

A definition of risk intelligence with illustrative examples.

Risk Register

A guide to creating a risk register with an example.

Risk vs Hazard

The difference between a risk and a hazard with examples.

Hazard

The definition of hazard with examples.

External Risk

The definition of external risk with examples.

Brand Risk

The common types of brand risk.

Risk Meaning

The meaning of risk with examples.

Risk Objectives

Examples of measurable risk objectives.

Risk Characteristics

The basic characteristics of risk.

Risk Planning

An overview of risk planning with examples.

Risk Assessment Example

An overview of risk assessment with illustrative examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map