CISR Elements Of Risk Management Practice Test

Hazard is a condition or characteristic that may increase the likelihood or severity of a loss. In risk management, a hazard is something in the environment or in a process that, if present, makes a loss more probable or more damaging. This distinguishes it from other terms: risk describes the overall chance and impact of loss (the likelihood times the consequence); exposure refers to the asset or person that is subject to loss because they are in harm’s way; prevention refers to actions taken to reduce either the probability of loss or its severity, thereby lowering risk, but it is not the definition of a hazard itself. For example, a wet floor is a hazard because it elevates the chance of slipping and injury; a person or asset present on that floor is exposure; and cleaning the floor or placing a caution sign are prevention measures that reduce risk.