Damage to Physical Assets

Damage to physical assets in operational risk management refers to the harm or loss of tangible items such as buildings, machinery, and equipment that a business relies on to operate effectively. This damage can arise from natural disasters, accidents, vandalism, or equipment failure. Understanding and managing this risk is crucial because it can lead to operational disruptions, financial losses, and reduced productivity. Companies implement preventive measures, insurance, and recovery plans to mitigate these risks and ensure continuity in their operations.