Overview
Risk likelihood refers to the probability of a risk event occurring. In risk management, accurately estimating this likelihood helps in prioritising risks and determining the most appropriate control measures.
In StartRisk users are required to assess the Inherent Likelihood for each user generated risk. In the case of a suggested risk, StartRisk’s AI will provide a recommended Inherent Likelihood rating for users to review.
StartRisk uses a standardised likelihood criteria across all risks and risk classes. When assessing the risk likelihood reference this table to ensure consistent assessments:
Likelihood | Description of Likelihood |
Rare | Will only occur in exceptional circumstances (0% - 5% chance) |
Unlikely | Remote chance of occurring (5% - 30% chance) |
Possible | May occur (31% - 60% chance) |
Likely | Will probably occur, more likely to occur than not (61% - 90% chance) |
Almost certain | Expected to occur in most circumstances (91% - 100% chance) |
Key Concepts
Inherent Likelihood is the probability of a risk occurring in the absence of any controls or actions to prevent or mitigate it. It's the 'natural' level of risk, untouched by any intervention.
Residual Likelihood is the remaining probability of a risk occurring after considering the impact of any control measures. It's the level of risk that persists after efforts to reduce it. StartRisk will automatically assess this as controls are added against a risk.
Example
Imagine a warehouse storing flammable materials. The inherent likelihood of a fire is relatively high due to the nature of the materials, without considering any safety measures in place.
Using the likelihood criteria we assess that, without any controls being in place, it is likely that a fire could occur.
Once we complete the inherent risk assessment we ended up with a rating that is outside of our appetite. So we implement controls including employee training, fire extinguishers, and smoke detectors.
The employee training control reduces the likelihood of a fire which is represented by the rating after controls applied.