What is a Hazard and a Risk?
One of the most confusing elements of risk management is understanding the difference between a hazard and a risk. If you don't understand the difference between a hazard and a risk, you will undoubtedly make a mess out of your Proactive Hazard Analysis Tool and the subsequent Hazard and Risk Register.
Let's take the Proactive Hazard Analysis Tool as an example. (Please bear with us, but this page is supposedly devoted to the Risk Exposure module and not Proactive Hazard Analysis Tool. We mention the Proactive Hazard Analysis Tool to help us illustrate the difference between a hazard and a risk.
Airlines, airports, aviation maintenance, helicopter operators all share similar hazards and are able to start their operational risk profiles based on others experiences and input.
Once Operation Risk Profiles are filled with identified hazards:
- Hazards are assessed using a Risk Matrix (probability and severity). Hazards are color-coded to quickly identify risk levels
- "Estimated Annual Costs" may be determined using "Assessed Cost Per Occurrence" multiplied by "Frequency Per Year"
- Hazards are assigned responsible managers and a review cycle
- Mitigation measures are assigned to each hazard to reduce risks inherent to their operations
- "Residual Risk Assessment" are next conducted to determine whether the proposed mitigation strategies sufficiently reduce hazards' risk
- Recovery measures are identified in preparation that the hazard may occur
- For High Risk Hazards, tracking and management involvement are required. Management must approve any proposed mitigating controls
- Medium Risk is the minimum acceptable level of risk. Tracking and management are required
- Low Risk is the target level of risk. Identified hazards are not required to be actively managed, but are documented
Hazard and Risk Definitions
Any existing or potential condition that can lead to:
- Injury, illness, or death to people
- Damage to or loss of a system, equipment,
- Damage to the environment
Hazards are conditions that are prerequisite to an accident or incident.
Safety Risk Definition
The composite of the likelihood (i.e., risk) of the
potential effect of a hazard, and predicted severity of that effect. As an example,
the possibility of an overshoot by an aircraft landing on an icy runway would be
considered a safety risk of the hazard. The hazard is "icy runway" and the risk
is "possibility of an overshoot."
There are five well-defined phases to the safety risk management process:
- Phase 1. Describe the system
- Phase 2.
Identify the hazards
- Phase 3. Determine the risk
Phase 4. Assess and analyze the risk
- Phase 5.
Treat the risk (i.e., mitigate, monitor and track)
Hazard and Risk Defined. Now What?
Now that we know what is a hazard and what is a risk, we can illustrate the risk management procedure and provide a general workflow of entire risk management process. Remember there are always exceptions, and the depth of an investigation and mitigation must correspond to the severity and potential risk of occurrence, or recurrence.
The following work flow procedure the process followed for identifying and documenting hazards, for determining associated risk(s), severity and probability of occurring and the strategies for risk mitigation.
Hazard and Risk Exposure Module
It was imperative you have an understanding of what is the difference between hazards and risks for you to understand the Hazard and Risk Exposure module.
Hazard and Risk Exposure module consists of two parts:
- Risk mitigation report for selected/previous month (year)
- Issues reported by month by risk level
Filters exist to review the hazard and risk exposure for each particular division in the company. Time filters also exist to review the hazard and risk exposure for other months and years.
As time passes, the hazard and risk exposure module vividly illustrates safety management activity within the organization. If there is no activity, there will certainly be a meaningless chart at the bottom of the page and hopefully motivate you to increase your safety promotion activities.
More Aviation Risk Analysis & Management Information
FAA Risk Management Handbook (PDF)
Safety Risk Management Resources by FAA (System Safety Process Steps)
Operational Risk Management Training by SCSI
Skybrary Aviation Risk Management Overview