6 Valuable Methods Of Risk Assessment You Must Know

A risk assessment is a methodical procedure carried out by a qualified individual that entails locating, evaluating, and managing risks and hazards that are present in a scenario or location. With the use of this decision-making tool, you may decide which risks should be prioritized based on their likelihood and potential impact on the company, as well as which controls should be implemented to remove or reduce those risks.

There are several methods used to carry out risk assessment, these methods are what we will be considering in this article.

Methods of Risk Assessment

Methods of risk assessment differ in different sectors and organizations, but the method(s) adopted should best suit the organization’s process.

Before we get into the subject of the article, let use refresh our minds on what risk assessment entails.

Risk assessment is the determination of a quantitative or qualitative estimate of risk related to a well-defined situation and a recognized threat (also called a hazard).

Mathematically:

Quantitative risk assessment requires calculations of two components of risk (R)

The magnitude of the potential loss (L), and

The probability (p) that the loss will occur.

In summary, to conduct a risk assessment, the 5 main steps are always adopted.

1. Identify the hazard: Be it physical, mental, chemical, or biological.
2. Decide who could be harmed
3. Assess the risk
4. Make a record of findings

In engineering or complex systems, sophisticated risk assessments are often made within safety engineering and reliability engineering when it concerns threats to life, environment, or machine functioning.

Methods for risk assessment may differ between industries, and whether it pertains to general financial decisions or environmental, ecological, or public health risk assessment.

Several methods of risk assessment can help identify risk, assess the risk appropriately, and help in risk management.

Some of the most commonly used methods of risk assessment include:

1. What-if analysis
2. Fault tree analysis (FTA)
3. Failure mode event analysis (FMEA)
4. Hazard operability analysis (HAZOP)
5. Incident BowTie
6. Event Tree

1. What-If Analysis

Definition:

What-If Analysis is a brainstorming-based qualitative risk assessment method where team members pose “what if” questions to identify potential deviations, failures, and hazards in a process or system.

Practical Approach:

Step-by-Step:

1. Form a Team: Assemble a multidisciplinary team with expertise in the process.
2. Define the Scope: Choose the system, process, or activity to assess.
3. Develop What-If Questions: Ask questions like:
   • What if power fails?
   • What if a valve is left open?
   • What if pressure exceeds the design limit?
4. Evaluate Consequences: Discuss what could happen in each scenario.
5. Identify Safeguards: Check if existing controls mitigate the risk.
6. Recommend Actions: Suggest improvements or additional controls.
7. Document the Findings: Record the questions, answers, consequences, and recommendations.

Example:

In a gas storage facility:
What if the pressure relief valve fails?
Consequence: Tank rupture, fire.
Safeguard: Secondary relief valve.
Recommendation: Install a pressure alarm system.

2. Fault Tree Analysis (FTA)

Definition:

FTA is a deductive, top-down method that analyzes the causes of system-level failures using logic diagrams. It helps identify root causes and interrelationships of failures.

Practical Approach:

Step-by-Step:

1. Define the Top Event: Identify the undesired event (e.g., explosion).
2. Develop the Fault Tree: Use logic gates (AND/OR) to break down contributing factors.
3. Analyze Basic Events: Look at component-level failures that lead to the top event.
4. Quantify Probabilities (if data is available): Use failure data to assess likelihood.
5. Evaluate Critical Paths: Identify the most probable failure paths.
6. Recommend Controls: Suggest corrective or preventive actions.

Example:

Top event: Fire in chemical plant
Contributors: Pump failure OR electrical short circuit
Basic events: Overheating, poor insulation, motor wear
Recommendation: Implement thermal sensors, preventive maintenance.

3. Failure Mode and Effects Analysis (FMEA)

Definition:

FMEA is a systematic approach to identifying all possible failures in a process or product and assessing their effects to prioritize which failures need attention.

Practical Approach:

Step-by-Step:

1. Select the Process/System: Break it into components or steps.
2. Identify Failure Modes: For each step/component, ask: How can it fail?
3. Determine Effects: What are the consequences of each failure?
4. Assign Ratings:
   • Severity (S) – Impact on safety/productivity
   • Occurrence (O) – Likelihood of happening
   • Detection (D) – Likelihood of detecting before impact
5. Calculate Risk Priority Number (RPN):
   RPN = S × O × D
6. Prioritize and Act: Focus on high RPN items and implement controls.
7. Review and Update: After implementing actions, recalculate RPN.

Example:

Pump failure in the cooling system
Failure Mode: Seal leakage
Effect: Overheating
Severity = 8, Occurrence = 6, Detection = 4 → RPN = 192
Action: Use higher quality seals, conduct weekly checks.

4. Hazard Operability Analysis (HAZOP)

Definition:

HAZOP is a structured and systematic technique for identifying potential hazards and deviations in process systems using guidewords such as “more,” “less,” “reverse,” etc.

Practical Approach:

Step-by-Step:

1. Define the Process: Use P&IDs (Piping and Instrumentation Diagrams) or flowcharts.
2. Divide into Nodes: Break the system into logical sections (nodes).
3. Apply Guidewords: For each node, use guidewords like:
   • No, More, Less, As well as, Reverse, etc.
4. Identify Deviations: Combine guidewords with parameters (flow, pressure).
   Example: “No flow”, “More pressure”
5. Evaluate Causes and Consequences: Analyze what could cause the deviation and its outcome.
6. Review Safeguards: Identify existing controls.
7. Recommend Actions: Suggest improvements to mitigate risks.
8. Document Results: Record all findings in HAZOP worksheets.

Example:

Node: Pump
Guideword + Parameter: “No Flow”
Cause: Blocked inlet
Consequence: Equipment overheating
Action: Install a flow sensor and alarm.

5. Incident BowTie

Definition:

BowTie Analysis is a visual risk assessment method that combines fault tree and event tree concepts to illustrate how hazards can lead to incidents and how barriers can prevent or mitigate them.

Practical Approach:

Step-by-Step:

1. Identify the Hazard: E.g., handling flammable liquid.
2. Define the Top Event: The point where control is lost (e.g., chemical spill).
3. List Threats (Left Side of Bowtie): Events that could cause the top event.
4. Add Preventive Barriers: Controls that stop the threats.
5. List Consequences (Right Side): Possible outcomes if the top event happens.
6. Add Mitigation Barriers: Controls that reduce the severity of consequences.
7. Review Barrier Effectiveness: Evaluate strengths and gaps in control systems.

Example:

Hazard: Flammable gas
Top event: Gas leak
Threat: Pipe corrosion
Preventive Barrier: Scheduled pipe inspection
Consequence: Fire
Mitigation Barrier: Fire suppression system

6. Event Tree analysis

Definition:

ETA is an inductive, forward-looking method that starts from an initiating event and analyzes the possible outcomes by considering the success or failure of safety systems.

Practical Approach:

Step-by-Step:

1. Identify the Initiating Event: An undesired but plausible starting point (e.g., fire alarm trigger).
2. List Safety Functions: Actions or barriers that can influence the outcome (e.g., sprinklers, evacuation).
3. Draw the Event Tree: Use branches to represent the success/failure of each function.
4. Analyze Outcomes: Follow branches to see different scenarios and their consequences.
5. Evaluate Probabilities (if available): Quantify the likelihood of each path.
6. Identify High-Risk Scenarios: Focus on worst-case branches.
7. Recommend Improvements: Enhance weak or failed barriers.

Example:

Initiating Event: Small fire in the electrical panel
Branch 1: Sprinkler activates → Fire controlled
Branch 2: Sprinkler fails → Evacuation successful → No injuries
Branch 3: Both fail → Fire spreads → Major damage
Action: Test sprinkler systems monthly and train staff in evacuation.

Summary

Using a combination of these methods provides a well-rounded approach to managing operational, process, or organizational risks effectively.

Related Articles

10 Top Chemical Risk Assessment Tools

39 Top Risk Assessment Tools In Nursing

12 Risk Assessment Tools For Healthcare

8 Standardized Fall Risk Assessment Tools (FRAT)