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Steps of risk management - Step 2: Assess risk

Once hazards have been identified, we must assess the level of risk. That is, we must determine how likely it is that someone could be harmed by the hazards and how serious the injury or illness could be.

First, consider an accident occurring, the:

  • Severity (or the consequence)

    • How serious would the injury or illness be?
    • How many people are at risk?

  • Likelihood

    • Has it happened before?
    • How often might it happen?
    • When is it most likely to happen?

When estimating consequence and likelihood, also consider what risk controls are already in place.
For example, personal protective equipment may already be used, or guarding may be in place.

Also think about the way different hazards linked to an activity may interact to affect the severity or likelihood of an accident occurring.

A risk management matrix is one way of combining severity and likelihood to give risk level, where:

Extreme risk
Immediate action required.
High risk
Senior management attention needed.
Medium risk
Management responsibility must be specified.
Low risk
Manage by routine procedures.
  Insignificant Minor Moderate Major Catastrophic
Almost certain High risk High risk Extreme risk Extreme risk Extreme risk
Likely Medium risk High risk High risk Extreme risk Extreme risk
Possible Low risk Medium risk High risk Extreme risk Extreme risk
Unlikely Low risk Low risk Medium risk High risk Extreme risk
Rare Low risk Low risk Medium risk High risk High risk

Based on a combination of:

  • Consequence (or severity) that may be:

    Insignificant
    Non-injury incident. Minor effects on biological or physical environment.
    Minor
    Injury or ill health requiring first aid. Moderate, short-term effects but not affecting ecosystem functions.
    Moderate
    Injury or ill health requiring medical attention. Serious medium-term environmental effects.
    Major
    Injury or ill health requiring hospital admission. Very serious long term impairment of ecosystem functions.
    Catastrophic
    Fatality or permanent disabling injury. Very serious long term impairment of ecosystem functions.
    and

  • Likelihood (or chance) that may be:

    Almost certain
    The event will occur on an annual basis.
    Likely
    The event has occurred several times or more in your career.
    Possible
    The event might occur once in your career.
    Unlikely
    The event does occur somewhere from time to time.
    Rare
    Heard of something like this occurring elsewhere.

The risk management matrix is from the Australian Standard/New Zealand Standard 4360: Risk Management (AS/NZS 4360).