Risk Type

From Open Risk Manual

Definition

Risk Type is a classification label that is used to identify and characterise the variety of risk phenomena to which an individual or organization is exposed. A Risk Taxonomy is constructed out of a collection of risk types organized along some particular classification scheme.

Characterisation

Given the wide scope of possible risks there are many different dimensions that can be used to classify risks, indicatively:

  • Discrete risk events such as those covered by insurance, versus "continuous" risks, for example exposure to fluctuating prices and Market Risk
  • Whether there is a legal, contractual basis to the risk (Contractual Risks)
  • The underlying risk factors that create the risk (physical forces, economic behavior etc.)
  • The type of impact / loss generated (physical, emotional, reputational, monetary etc.)

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