How to Assess Risk

Taking risks may not feel like a part of everyday life, but many of our choices come with potential consequences. They can feel like small risks, like trusting your phone alarm to wake you up in time for work, or they can feel tremendous, like entrusting someone with control of your business and therefore your livelihood. We all take on risks as a part of life, but knowing when something is a risk, assessing the danger, and preparing for the worst outcomes are major steps you can take to ensure that the future turns out for the best.

Risks are a matter of possibility. In considering them, we need to account for the probability of something going wrong as well as what consequences may happen if it does. Taking time to assess risks can help in choosing which to take on, giving you time to analyze and prepare for the potential outcomes. This practice can be useful in helping you:

– prepare for negative consequences, with planning in place to neutralize the potential issues, protect against them, or recover from them.
– improve upon the safety of a project, keeping in mind what dangers there are and adjusting accordingly.
– decide whether or not the risk is worth accepting.

Some risks aren’t worth taking, whether because of the overwhelming possibility of failure or the potential risk being just too high. Many things can be at stake with any given situation, so you’ll want to consider what type of risks you’re dealing with. Potential risk types may be:

– human, related to someone’s health or possible injury;
– financial, tied directly to your money and assets;
– operational, putting your business’ productive capacity on the line; and/or
– reputational, which may damage your personal image or your business’ professional one.

When determining how dangerous a risk is, you’ll want to take into account what type it is, whether you can plan or protect yourself against repercussions, and whether the positive outcomes affect the negative probability. There are many recent events and pieces of news that may cause you to start assessing risks, such as whether TikTok is a risk to national security, if the use of 5G can really be harmful to your health, and the threat of hackers in the rollout of COVID-19 vaccines. Ultimately, risks should be fully assessed and taken into consideration in order to move through life in the most practical, successful manner.

When faced with risks in business, the law, or cybersecurity, I am here to help you minimize the risks you face to protect yourself and your assets. Feel free to get in touch with me to discuss further.

The information presented here is for general educational purposes only. It does not constitute legal advice and does not create an attorney-client relationship.