Risk Level measures a risk based on its impact and likelihood. It helps prioritise risks for management and mitigation.
Components of risk level:
- Impact: The severity of the consequences if the risk occurs.
- Likelihood: The probability that the risk will occur.
Risk level classification:
- Low: Minimal impact and low likelihood
- Medium: Moderate impact or likelihood
- High: Significant impact or high likelihood
Benefits of assessing risk level:
- Facilitates informed decision-making
- Supports effective resource allocation
- Enhances communication with stakeholders