residual risk
Residual risk refers to the remaining risk that stays after efforts have been made to reduce or eliminate potential threats. Imagine you take precautions to secure your home, like installing a security system and locking doors. Despite these measures, there's still a chance a break-in could occur—that chance is your residual risk. In broader contexts, organizations assess various risks, implement controls, and then acknowledge that some level of risk will always be present, which they must manage ongoing. Understanding residual risk helps in making informed decisions about safety, security, and resource allocation.
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Residual risk refers to the remaining risk that exists after a person or organization has implemented measures to reduce or manage potential dangers. For example, if a factory installs safety equipment to prevent accidents, some risk of an incident may still remain due to unforeseen factors or human error. This leftover risk, after all safety measures have been taken, is what we call residual risk. It reminds us that while we can mitigate risks, we can’t eliminate them entirely, and we should be prepared for the possibility of unexpected outcomes.