Risk Identification
What Does Risk Identification Mean?
Risk identification is the process by which a company’s management seeks to identify potential risks in its business operations. This enables them to take preventive measures or develop appropriate solutions, such as securing adequate insurance coverage, in the event that these risks occur.
Insuranceopedia Explains Risk Identification
An insurance company may collaborate directly with a business organization to assist with the risk identification process. The business may allow the insurer to assess its operations or inspect its workplace to identify any existing or potential risks. The insurer will then recommend improvements to reduce risks, such as implementing better safety standards.
The identified risks are analyzed based on their likelihood of occurrence, predicted frequency, and estimated cost of potential losses.
