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How To Create A Risk Management Plan + Template & Examples

Emily has been working in project management for over 13 years. In this time, she has worked using a variety of project management methodologies and has been a strategic project manager, facilitator, and Scrum master. She is also an avid coach and trainer, who wants to ensure the development of the next generation of project professionals through training, knowledge sharing and team building.

Sarah is a project manager and strategy consultant with 15 years of experience leading cross-functional teams to execute complex multi-million dollar projects. She excels at diagnosing, prioritizing, and solving organizational challenges and cultivating strong relationships to improve how teams do business. Sarah is passionate about productivity, leadership, building community, and her home state of New Jersey.

Dramatically reduce your chances of project failure with a risk management plan: learn how to create one for your projects, get some examples, and download our template!

A clear and detailed risk management plan helps you assess the impact of project risks and understand the potential outcomes of your decisions. It can be a useful tool to support decision making in the face of uncertainty.

However, I have seen projects fail because stakeholders did not take the risk management plan seriously or because the project failed to implement a risk management strategy.

Read on to learn how you can avoid these mistakes for your projects.

What Is A Risk Management Plan?

A risk management plan, or RMP, is a document describing how your project team will monitor and respond to unexpected or uncertain events that could impact the project.

The risk management plan:

• analyzes the potential risks that exist in your organization or project
• identifies how you will respond to those risks if they arise
• assigns a responsible person to monitor each risk and take action, if needed.

Team members and stakeholders should collaborate to create a project risk management plan after starting to develop a project management plan but before the project begins.

What’s Covered In A Risk Management Plan?

The fidelity of your risk management plan will vary depending on the nature of your project and the standard operating procedures that your organization uses. 

A project risk management plan seeks to answer:

• What is this project, and why does it matter?
• Why is risk management important for the project’s success?
• What will the team do to identify, log, assess, and monitor risks throughout the project?
• What categories of risk will we manage?
• What methodology will be used for risk identification and to evaluate risk severity?
• What is expected of the people who own the risks?
• How much risk is too much risk?
• What are the risks, and what are we going to do about them?

Depending on the project, this document could be hundreds of pages—or it could be less than a dozen. So how do you decide how much detail to provide? Here are two illustrative examples (but by no means are they the only ways to do it!).

PS. If you’re looking for additional information, we also did a workshop on managing risk that’s available for DPM members .

2 Types Of Risk Management Plans

In this section, we’ll cover 2 common types of risk management plans—a RAID log and a risk matrix.

#1: Simpler Version—Lightweight RAID Log

In its most minimal form, a risk management plan could be a handful of pages describing:

• how and when to assess risk
• the roles and responsibilities for risk owners
• at what point the project risk should trigger an escalation.

Instead of a formal risk register designed to calculate risk severity, a lightweight risk management approach may simply involve maintaining a risk list in your weekly status report .

This list (also known as a RAID log) tracks risks, assumptions, issues, and dependencies so that the project team and sponsor can review and further discuss.

When to use it : this approach could be useful for a small non-technical project being executed by a team of 3-4 people in an organization that does not have a standard approach to risk management.

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#2: Complex Version—Risk Matrix

When an organization already has a culture of risk management, there may be a template to follow that demands a high level of detail. These details may include a full description of the methodology that the organization will follow to perform qualitative and quantitative risk analysis, along with an impact matrix. 

An impact matrix, or risk assessment matrix, shows the relationship between risk factors in calculating risk severity. Risks that are high-probability and high-impact are the most severe.

An organization may design its risk register template to prioritize and assign a numerical severity score to measure the level of risk. 

Additionally, you may need to create a risk breakdown structure to decompose higher-level risk categories into smaller, more specific risk subcategories

When to use it : making a detailed risk management plan isn’t about creating complexity for complexity’s sake—you and your team will be glad to have this level of detail on a large enterprise project that involves larger teams, multiple stakeholders, and high stakes that could have a significant impact on the business.

In terms of tooling, there are some great options available for managing risk on your project. Many organizations favor spreadsheets as part of an enterprise business software bundle, but there are also some providers that support risk management planning specifically. 

Two examples of risk management software are Wrike and monday.com . These tools integrate the entire risk management process with the wider project management plan.

The most important consideration is not the tool used, but rather the discussions you’ll have with your team and your project sponsor about how to navigate risks to increase the likelihood of project success.

How To Make A Risk Management Plan 

Below is a step-by-step guide to developing your own version of a risk management plan. Keep in mind that the nature of these steps may vary depending on the type of project involved, so don’t be afraid to tailor these steps to meet project and organizational needs.

The first 2 steps in the process are preparing supporting documentation and setting the context.

Next, decide how you want to identify & assess risks, and continuously identify those risks.

The next steps in the risk management process include assigning risk owners, populating your risk register, and then publishing it.

Make sure to monitor and assess risks throughout the project, and once the project is over, archive the risk management plan in a way that it can be reused for future projects.

1. Prepare supporting documentation

You’ll want to review existing project management documentation to help you craft your risk management plan. This documentation includes:

• Project Charter: among other things, this document establishes the project objectives , the project sponsor, and you as the project manager. Frankly, it gives you the right to create a project management plan and then a risk management plan within that. If formal project charters aren’t used at your organization, you should at least have this documented in an email or a less formal brief.
• Project Management Plan: not to be confused with the project strategy , this document outlines how you’ll manage, monitor, and control your project, including what methodology to use, how to report progress, how to escalate issues, etc. Your risk management plan should act as a subcomponent of the project management plan.
• Stakeholder Register: it’s good to have a solid idea of who the project stakeholders are before assessing risk. Each of these stakeholder groups presents a different set of risks when it comes to people, processes, and technology. You can also invite stakeholders to identify risks throughout the project and even nominate them as risk owners!

2. Set the context

Once you have your supporting documentation available, use it to frame up the discussion around your risk management plan. Specifically, take the project description and objectives from the project charter and use them to outline the business value of the project and the negative impacts that would result should the project fail .

The introduction to your risk management plan should explain the intent of this document and its relationship to the overarching project management plan. Use this context to drive a conversation about risk management with your team and your project sponsor.

3. Decide with your team how to identify and assess risks

Different methodologies are appropriate for different types of projects. The methods you choose also need to be sustainable for the team to perform throughout the project.

The key here is to have the right discussions and gather input to build consensus with your team and your stakeholders early in the project life cycle. Use these discussions to agree on risk categories, risk response plans, and ways to calculate risk severity.

4. Continuously identify risks

Once you’ve decided on the methodology to use, now the real fun begins—thinking about the things that could go astray during your project!

A great way to do this is to hold a risk workshop—a group session involving your team, key stakeholders, project sponsor, and subject matter experts to identify, evaluate, and plan responses to risks.

In the example below, I have used a simple overview from a sample project. During the workshop, you’d discuss everything in columns E-R and make sure that you have clear, SMART outcomes to put in each of the boxes. (SMART stands for specific, measurable, action-oriented, realistic, and timebound.)

I like to keep a copy of the risk register on my desk during the workshop to make sure that each column is discussed and populated appropriately. After the workshop, add any supporting details to finalize the document.

The project manager’s role during a risk workshop is to facilitate the meeting effectively. This involves brainstorming with stakeholders to evaluate both known risks and possible risks that may not have been considered. It could look something like this:

At the end of the workshop, your goal is to come away with stakeholder alignment on project risks, the desired risk response, and the expected impact of the risks. Stakeholder buy-in is critical for a successful risk response, so time in the workshop is likely to be time well-spent.

5. Assign risk owners

As you identify risks, you should work with the team to assign owners (including yourself). Project managers are responsible for risk management too!

That being said, the project manager can’t own everything. Assigning risk owners can be the most difficult area of risk management to finalize because it requires stakeholder accountability.

Make sure that risk owners have reviewed the risk management plan and are clear on their responsibilities. Follow up with them as you monitor risk throughout the project life cycle.

6. Populate the risk register

Following the risk workshop, finish populating any information required for the risk register . This includes a description of the risk, the risk response category, detailed risk response, risk status, and risk owner.

What’s important to remember during this exercise is ensuring that the risk response reflects the severity and importance of the risk. You can then review the broader risk register to understand any wider correlations that might exist among risks.

7. Publish the risk register

Send around the updated risk register within 48 hours of the workshop to give everyone time to read and process the output.

You can also use the risk register within wider project discussions to explain or define the timeline for a project or specific actions that need to be completed. It’s important to be timely so that the output can be used in other project artifacts.

8. Monitor and assess risks continuously throughout the project

New risks are introduced to a project constantly. In fact, mitigating one risk might create another risk or leave “residual risk.”

If feasible within your project constraints, try to run risk workshops periodically throughout the duration of the project or incorporate risk register reviews into other recurring planning activities. 

Nothing feels quite as deflating as when you swerve to avoid one risk only to drive blindly into another, much bigger risk.

9. Archive your risk management plan in a reusable & accessible format

After your project, it’s a good idea to archive your risk management plan for future reference.

There are many reasons why (in fact, it may be mandatory in your organization), but here’s the main one: while not every risk management plan suits every project, the risk and response strategies may remain applicable. Use past risks to create a foundation for your next project.

Examples Of Risk Management Plans In Action

Admittedly, the word “risk” is itself a bit broad. Not having enough resources to hit the project deadline is a risk. Hurricane season is a risk. Disruption of the space-time continuum is a risk. 

So, where do you draw the line on what types of risks to consider—which risks have a large enough potential impact to require attention, or even a contingency plan?

Here’s one way to think about it:

If the item is related to people, processes, resources, or technology and has any likelihood of threatening project success, you should log it as a risk.

Now, you might not need to do a comprehensive analysis on every risk in your risk register, but you do need to revisit the risks identified and conduct risk monitoring throughout the project. If someone starts testing a time machine near your office, for example, your highly unlikely space-time continuum risk has escalated.

Does this matter?

Yes. To prove it, here’s a simple example of risk management that saved a project:

A colleague was working on a service design project that required in-person research (this was before COVID-19), and on her RACI chart , she had clearly communicated to the client that it was the client’s responsibility to book a meeting space to conduct this research. She had logged a risk with her team that the client might not be able to secure a space.

Two days before the research commenced, the client informed her they weren’t able to secure the space. Luckily, her risk mitigation strategy on this particular risk was to book a backup space at the office, which she had done weeks ago. 

Something that could have stalled the project for weeks had become nothing more than an email that said something like “All good, we’ll use our space."

Here’s another example:

An agency agreed to an aggressive timeline for a highly technical project. The team had raised concerns as the project was being initiated, but leadership still wanted to proceed. The project manager and technical architect logged the timeline risk before the project started, and their risk response strategy was to re-evaluate the project timeline using a Monte Carlo simulation. 

After calculating a pessimistic, optimistic, and likely duration for every project activity on the critical path, they determined mathematically that the project had a 3% chance of hitting the deadline.

The project manager raised this with the client, and the client agreed to re-scope the project and re-baseline the project before getting going. It was too big of a risk for them to take.

More Articles

Project risk management: how to do it well & 5 expert tips, time tracking: your secret risk management superpower, increase project success with a risk register + easy template, risk register template.

There are a lot of risk register templates available online, and I would recommend looking at one that fits your needs, rather than one that includes every possible scenario. 

In the risk management plan template available in DPM Membership, we’ve tried to keep the risk register as simple as possible to ensure that you’re able to enter the relevant information for your project.

Best Practices For Risk Management Plans

Consider these best practices to help you craft an effective risk management plan:

• Develop the risk management plan during the project planning phase, after you’ve developed the project charter and the project management plan, to give stakeholders the necessary context
• Adapt the format and level of detail of the risk management plan to align with the needs of the project, industry, and organization that you support
• Assign a risk owner to every risk identified in your risk register, and hold them accountable for the risk response
• Continuously identify risks throughout the project life cycle and update the risk register accordingly
• During project closing , archive your risk management plan and use it to inform risk planning on future projects.

What Do You Think?

Whether you’re a novice project manager or a seasoned pro, having a good risk management plan is vital to project success. And, the key to a successful risk management plan is adaptability.

You need to make sure that, with every project you run, you can adapt the risk management plan to your project, industry, and organization.

If you’ve got a great story about a risk you mitigated successfully on your project or a different way to manage risk, please share it in the comments below!

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Risk management plan template

Starting a project without considering risks is, well, a big risk to take. Prevent major issues from occurring in your project with a risk management plan template. Learn how to create a risk management plan template in Asana.

Sign up to create your own template.

INTEGRATED FEATURES

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Before you start a project, it’s important to take into account any potential issues and risks that can prevent your project from progressing smoothly. 

Using a risk management plan template can help you mitigate risk and establish a contingency plan so you can successfully hit your goals without a hitch. Here’s how to do it. 

What is a risk management plan template?

A risk management plan template is a tool to help project managers prevent and measure potential risks. While the content of the template may change from project to project, the main structure of the template will not change. Using a template to manage the risk management process can help expedite future projects and align your team members so they know what to expect in the event that a risk occurs.

Creating a risk management plan template also makes it easier to manage projects with multiple stakeholders. When everyone is familiar with your established template, there’s less of a learning curve each time you start a new project.

What’s the purpose of a risk management plan?

Why create a risk management plan template.

Creating a risk management plan template is a best practice for project management professionals, and for good reason. Here’s why you should create a project risk management plan template before starting a large project.

Proactively prevent risks

With a risk management plan template, you can proactively ensure that problems that could occur already have a solution before they ever happen. By assigning a specific risk to a team member, you’re specifying the person responsible for actively monitoring each potential risk. 

For some teams, developing mitigation strategies for high-impact projects is necessary before a project is even approved. This prevents high-risk projects from affecting major business operations. If your team doesn’t have mitigation plans in place, your project may not make it past the approval stage. 

Provide clarity

A risk management plan template gives your team clarity, especially when it comes to contingency plans . Stakeholders often don’t enjoy hearing that something could go wrong with a project schedule , but if you and your team already have response strategies in place, it’s much easier to quell that anxiety. Collaborative work management software like Asana allows everyone on your team to access important risk management documentation, such as a risk log, a risk assessment matrix , or other project documents. 

Encourage accountability

It’s not easy to own up to an issue when things go wrong. But when there’s an assigned risk owner, that individual is responsible for mitigating that risk as much as possible if it occurs. This allows team members to evaluate the negative impact of a potential risk and develop contingency plans if or when issues arise. Individual team members have the agency to find the right solution. And if any key stakeholders have questions regarding that specific risk, they know exactly which team member to ask. 

What to include in your risk management plan template

Creating a risk management plan template is easy, but the way you manage information within the plan can vary from team to team. So how should you organize the information in your risk management plan template?

One of the easiest ways to do this is by importance—for example, by ranking risks according to their potential impact on your project. Or, you could organize your risk management plan template by the likelihood of each risk happening. 

No matter how you organize your risk management plan template, it’s important to utilize a tool that is customizable and collaborative. That way, your team can organize your risk management plan template in a way that makes the most sense for your team. 

4 steps to use your risk management plan template

Brainstorm which risks to add. Use collaborative software so everyone on your team can identify and add any potential risks that can negatively impact your project. 

Assess the probability and impact of each risk. The probability and impact of each risk combined represents the potential impact of the risk. Make sure your template has a way to track both risk likelihood and severity.

Predict how likely each risk is . Based on historical data or previous projects, team members can predict the probability that each risk will occur. 

Monitor risks during the project lifecycle. The easiest way to do this is to assign team members a specific risk to monitor throughout the lifetime of a project.

Integrated features

Custom fields . Custom fields are the best way to tag, sort, and filter work. Create unique custom fields for any information you need to track—from priority and status to email or phone number. Use custom fields to sort and schedule your to-dos so you know what to work on first. Plus, share custom fields across tasks and projects to ensure consistency across your organization.

Dependencies . Mark a task as waiting on another task with task dependencies. Know when your work is blocking someone else’s work, so you can prioritize accordingly. Teams with collaborative workflows can easily see what tasks they’re waiting on from others, and know when to get started on their portion of work. When the first task is completed, the assignee will be notified that they can get started on their dependent task. Or, if the task your work is dependent on is rescheduled, Asana will notify you—letting you know if you need to adjust your dependent due date as well.

Start dates . Sometimes you don’t just need to track when a to-do is due—you also need to know when you should start working on it. Start times and dates give your team members a clear sense of how long each task should take to complete. Use start dates to set, track, and manage work to align your team's objectives and prevent dependencies from falling through the cracks.

Subtasks . Sometimes a to-do is too big to capture in one task. If a task has more than one contributor, a broad due date, or stakeholders that need to review and approve before it can go live, subtasks can help. Subtasks are a powerful way to distribute work and split tasks into individual components—while keeping the small to-dos connected to the overarching context of the parent task. Break tasks into smaller components or capture the individual components of a multi-step process with subtasks.

Gmail . With the Asana for Gmail integration, you can create Asana tasks directly from your Gmail inbox. Any tasks you create from Gmail will automatically include the context from your email, so you never miss a beat. Need to refer to an Asana task while composing an email? Instead of opening Asana, use the Asana for Gmail add-on to simply search for that task directly from your Gmail inbox. 

Outlook . As action items come in via email, like reviewing work from your agency or a request for design assets from a partner, you can now create tasks for them in Asana right from Outlook. You can then assign the new task to yourself or a teammate, set a due date, and add it to a project so it’s connected to other relevant work.

Zendesk . With Asana's Zendesk integration, users can quickly and easily create Asana tasks directly from Zendesk tickets. Add context, attach files, and link existing tasks to track work needed to close out the ticket. The integration also provides continuing visibility across both systems, so everyone is kept up to speed regardless of which tool they use. 

Jira . Create interactive, connected workflows between technical and business teams to increase visibility around the product development process in real time—all without leaving Asana. Streamline project collaboration and hand offs. Quickly create Jira issues from within Asana so that work passes seamlessly between business and technical teams at the right time.

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A risk management plan template is a helpful collaboration tool. If you’re looking for a way to connect your project team members and your key stakeholders, a risk management plan template can help your team get on the same page by compiling all work in one central place.

How do you use a risk management plan template?

A risk management plan template is most commonly used to help mitigate potential risks. Use your risk management plan template during the project planning phase. Brainstorm potential risks with your team and log them into your already existing template. Remember to include the likelihood of the risk happening, a description of the risk, and a team member who is responsible for that specific risk should it occur.

What is the purpose of a risk management plan template?

Use a risk management plan template to help mitigate risks as your team moves through the project lifecycle. You can use a risk management plan template to help align project managers and team members to establish a tentative plan if a risk happens. You can also use it to help establish set processes for future projects. This can help expedite the risk management process and give your team some guidelines to work with.

How do I make a risk management plan template?

Your risk management plan template should live in a project management platform that your entire team has access to. By tracking this information in a central source of truth, you can track all potential risks, the impact of those risks, and who is responsible for monitoring and reacting to the risk if it occurs. Your risk management plan template should include descriptions of potential risks, the level of impact a risk would have on a project, the likelihood of that risk occurring, and a dedicated individual to monitor that specific risk.

What are the benefits of creating a risk management plan template?

A risk management plan template can help your team proactively prevent risks, provide your team clarity on contingency plans, and encourage accountability with team members. Creating a risk management plan template can help standardize processes across the organization, further preventing more risk.

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• SafetyCulture

Risk Management Plan Template

Risk management plan templates.

Mitigate risks and enact safety measures with risk management plan templates from SafetyCulture (formerly iAuditor).

• Eliminate paperwork with digital checklists
• Generate reports from completed checklists
• Free to use for up to 10 users

Identify, assess, control and monitor risks with the use of a risk management plan template. You can customize this template according to your business needs. Get maximum usage from this template by following the points below:

• Identify potential risks or threats and assess the likelihood, seriousness, and grade
• Take or attach photos of risks identified (if possible)
• Add notes or comments (if needed)
• Provide mitigation strategies for risks identified
• Sign off with digital signature of project manager

What is Risk Management?

Risk management is a project management tool that helps ensure workplace safety. Beyond accident prevention, risk management can make your team more efficient and better prepared to take on potential risks or hazards and improve the overall safety of your site.

4 Steps of the Risk Management Process

• Risk Recognition : Identify all potential risks affecting the project.
• Risk Assessment : Prioritize identified risks based on severity/damage impact.
• Risk Mitigation : Reduce the risk occurrence by implementing safety measures or removing/modifying certain aspects.
• Risk Monitoring : Evaluate the effectiveness of safety measures.

How To Write A Risk Management Plan

The following should be included in a risk management plan:

• All the identified risks that can potentially impact a project.
• A scale that estimates the probability of a risk occurring and the severity of impact.
• The consequences on the project should any of the risks take place.
• Mitigation actions to either prevent the occurrence of identified risks or serve as damage control should they happen.

Risk Management Plan For Construction

Construction companies are faced with huge risks. Aside from ensuring worker safety and promoting a culture of safety , construction companies have to plan for project delays, issues with clients, and miscommunication among team members.

While a lot of things can go wrong during construction, it is the project manager’s responsibility to resolve issues before they harm the project. To ease the construction process, the project manager needs a risk management plan .

Here’s an example of a risk management plan for construction:

• Assess management of resources.
• Identify project requirements.
• Discuss project phases with team.
• Assign tasks and set deadlines.
• Prepare for possible setbacks.
• Establish risk protocols.
• Inspect site for safety hazards.

What is A Risk Management Plan Template?

A risk management plan template is used in establishing a framework that will assess and manage risks associated with a project . Project managers can create multiple risk management plans from one template. Here is a sample template report of a Risk Management Plan PDF created in the context of warehouse safety.

Risk Management Plan Template Sample Report | SafetyCulture

What’s in the Risk Management Plan Template?

Generally, a risk management plan should include the following items:

• Project reference
• Risk identification
• Risk assessment
• Risk analysis
• Risk response/mitigation actions
• Personnel responsible for mitigation actions
• Associated costs
• Risk monitoring

Why Should A Project Manager Use A Risk Management Plan Template?

A project manager should use a risk management plan template because it can be confusing to keep track of several risk management plans for different projects. Even if a project manager has only one ongoing project, writing a risk management plan from scratch can seem daunting.

By using a risk management plan template, project managers can implement safety guidelines across a wide range of projects. Starting with a risk management plan template gives the project manager an idea of what to look out for.

Mitigate Risks With SafetyCulture’s Risk Management Plan Templates

Paper-based risk management plans cost you time and money. Save both by using a digital risk management plan. With SafetyCulture (formerly iAuditor), you can access and store your risk management plan on your mobile device , automatically generate reports after an inspection, and seamlessly share them with the appropriate people. Using SafetyCulture in your digital risk management process helps you create rich data sets to better support your decisions and encourages compliance within your organization.

SafetyCulture lets you proactively manage safety and quality in your business with the use of your mobile device or tablet. Use SafetyCulture as a risk management software and be able to:

• Streamline audits – Save time from manual entry when doing an audit. Attach notes and media directly during inspections.
• Automate communication – Receive immediate notifications when critical risks are identified or when audit scores start to drop.
• Deliver immediate actions – Create corrective actions for issues in need of immediate resolution. Assign actions to members of the organization and set the time, date, and priority level.
• Gain safety & quality insights – Get real-time insights from comprehensive reports that automatically generate every time you complete an audit. Preview a sample report here.
• Share reports immediately – Automatically send your reports to multiple recipients. Reports are shareable in multiple formats (PDF, Word, CSV, JSON, HTML, or XML) and delivery options (email, DropBox, SharePoint, or more).

Top 4 Risk Management Templates

Risk management checklist template.

You can use this Risk Management Template converted using SafetyCulture to help identify the risks associated with your projects. Choose control measures (elimination, substitution, engineering controls, administrative controls, PPE) to help eliminate risks. Use SafetyCulture to capture photo evidences of the hazards and generate reports even while onsite. This risk management checklist is customizable and allows you to include additional risk rating criteria appropriate to your projects.

Risk Management Framework Template

Use this Risk Management Framework Template to record the identified risks, consequences, probable causes, effects, and control measures. Describe the adequacy of existing controls. Rate the likelihood of risks associated with the project. You can use SafetyCulture even while you’re offline and capture photos of the hazard and generate reports. Assign mitigation actions, highlight priority level, and timeline to finish the task to appropriate team member via SafetyCulture’s Action feature and immediately receive feedback regarding the progress.

Project Risk Management Template

This Project Risk Management Template can be used to monitor risk management activities throughout the project. Identify the risks, likelihood, and consequences. Record how risks will impact the project. Identify the symptoms, triggers, strategy, and contingency plan to eliminate the risk. This template uses SafetyCulture’s repeat sections allowing you to ask recurring questions. Generate comprehensive reports and highlight the current status of risks with SafetyCulture.

ISO 31000 Risk Management Process Checklist

Use this risk management readiness checklist to find gaps and build your organization’s risk management system to be at par with ISO 31000:2018 ‘s standard. To ensure that best practices are consistently implemented and followed, this risk management process template provides a list of steps that risk managers can regularly check and monitor for progressive results. Additionally, this template lets you and your team:

• Plan the establishment of your Risk Management Framework
• Show leadership by making a commitment to risk management
• Make your organization’s personnel responsible for managing risk
• Design your organization’s unique risk management framework

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Free Project Management Templates

Risk Management Plan Template

How do you manage risks? Arm yourself with our Risk Management Plan, Risk Register, Risk Assessment Meeting Guide and Risk Assessment Meeting Agenda and you’ll have everything you need to manage the risks on your project. Be sure to include key technical members of your team, stakeholders and subject matter experts when identifying and controlling your risks.

Download Template

Introduction.

The Risk Management Plan template provided below can be downloaded by clicking on one of the icons above. This Risk Management Plan template is free for you to edit and use as you see fit. Project risk management is part science and part art, this template is a great tool to get you started in managing your project’s risks. Be sure to sign up for our Newsletter to ensure you receive announcements about new project management templates.

This section explains why risks exist and highlights the purpose and importance of the risk management plan. It provides a general description of why risk management is essential to effectively managing a project and describes what is needed before risk management can begin.

As organizations begin new projects they begin operating in an area of uncertainty that comes along with developing new and unique products or services. By doing so, these organizations take chances which results in risk playing a significant part in any project. The purpose of the risk management plan is to establish the framework in which the project team will identify risks and develop strategies to mitigate or avoid those risks. However, before risks can be identified and managed, there are preliminary project elements which must be completed. These elements are outlined in the risk management approach.

This project is considered a medium risk project as it has an overall risk score of 24 on a scale from 0 to 100. The project risk score is the average of the risk scores of the most significant risks to this project. A risk score below 16 is low risk project, a score between 16 and 45 is a medium risk project and a score above 45 is a high risk project.

Before risk management begins it is imperative that a foundation is established for providing structured project information, thus, the following project elements were completed and defined prior to developing this Risk Management Plan:

• Develop project WBS/WBS dictionary
• Develop master schedule and detailed schedules
• Estimate project cost and finalize budget
• Identify required and available resources
• Establish performance measurement metrics
• Frequency of distribution
• Distribution list
• Project Manager chairs the risk assessment meetings
• Project team participates in risk assessment meetings and members serve as meeting recorder and timekeeper
• Key stakeholders participate in risk assessment meetings
• Project Sponsor may participate in risk assessment meetings

Top Three Risks

It is important to explicitly state the top three risks to the project in the Risk Management Plan. This will make management aware of the top risks for the project and the nature of the risks.

The top three high probability and high impact risks to this project are:

Delay in Server Equipment Due to a manufacturer’s production backlog, the servers are not available for large scale application testing causing a delay in the project schedule. The project manager will mitigate this risk by using servers from the backup data center if needed.

Fiber Optics Connection Not Completed Due to construction delays in installing the fiber optic cable between the data center and the headquarters facilities users will not have a high speed connection between their site and the datacenter resulting in slow responses from the application making it unusable. The Project Manager will implement a site to site broadband Ethernet radio network between the data center and headquarters facility.

Network Operations Center (NOC) Not Appropriately Staffed Due to lead times associated with hiring and training additional staff, the NOC does not have the necessary staff to monitor the additional bandwidth associated with the project resulting in a delay to the project schedule. The project manager will mitigate this risk by working with the NOC to create an alternate work schedule to compensate for the staffing shortage until additional staff hiring and training is complete.

Risk Management Approach

This section of the Risk Management Plan provides a general description for the approach taken to identify and manage the risks associated with the project. It should be a short paragraph or two summarizing the approach to risk management on this project.

The approach we have taken to manage risks for this project included a methodical process by which the project team identified, scored, and ranked the various risks. The most likely and highest impact risks were added to the project schedule to ensure that the assigned risk managers take the necessary steps to implement the mitigation response at the appropriate time during the schedule. Risk managers will provide status updates on their assigned risks in the bi-weekly project team meetings, but only when the meetings include their risk’s planned timeframe. Upon the completion of the project, during the closing process, the project manager will analyze each risk as well as the risk management process. Based on this analysis, the project manager will identify any improvements that can be made to the risk management process for future projects. These improvements will be captured as part of the lessons learned knowledge base.

Risk Identification

Here the Risk Management Plan explains the process by which the risks associated with this project were identified. It should describe the method(s) for how the project team identified risks, the format in which risks are recorded, and the forum in which this process was conducted. Typical methods of identifying risks are expert interview, review historical information from similar projects and conducting a risk assessment meeting with the project team and key stakeholders.

For this project, risk identification was conducted in the initial project risk assessment meeting. The method used by the project team to identify risks was the Crawford Slip method. The project manager chaired the risk assessment meeting and distributed notepads to each member of the team and allowed 10 minutes for all team members to record as many risks as possible.

Expert Interview Two Expert Interviews were held for this project. The interviews revealed several risks which were then mitigated by making changes to the project plan. The remaining risks are included in the Risk Register.

Risk Assessment Meeting A risk assessment meeting was held with key team members and stakeholders. The risks identified during this meeting were added to the project plan and Risk Register.

Historical Review of Similar Projects The project team reviewed the history of similar projects in order to determine the most common risks and the strategies used to mitigate those risks.

Risk Qualification and Prioritization

Once risks are identified it is important to determine the probability and impact of each risk in order to allow the project manager to prioritize the risk avoidance and mitigation strategy. Risks which are more likely to occur and have a significant impact on the project will be the highest priority risks while those which are more unlikely or have a low impact will be a much lower priority. This is usually done with a probability – impact matrix. This section explains risks were qualified and prioritized for this project. For more information on how to qualify and prioritize risks refer to our Risk Assessment Meeting Guide.

In order to determine the severity of the risks identified by the team, a probability and impact factor was assigned to each risk. This process allowed the project manager to prioritize risks based upon the effect they may have on the project. The project manager utilized a probability-impact matrix to facilitate the team in moving each risk to the appropriate place on the chart.

Once the risks were assigned a probability and impact and placed in the appropriate position on the chart, the recorder captured the finished product and the project manager moved the process on to the next step: risk mitigation/avoidance planning.

Risk Monitoring

This section of the Risk Management Plan template should discuss how the risks in the project will be actively monitored. One effective way to monitor project risks is to add those risks with the highest scores to the project schedule with an assigned risk manager. This allows the project manager to see when these risks need to be monitored more closely and when to expect the risk manager to provide status updates at the bi-weekly project team meetings. The key to risk monitoring is to ensure that it is continuous throughout the life of the project and includes the identification of trigger conditions for each risk and thorough documentation of the process.

The most likely and greatest impact risks have been added to the project plan to ensure that they are monitored during the time the project is exposed to each risk. At the appropriate time in the project schedule a Risk Manager is assigned to each risk. During the bi-weekly project team meeting the Risk Manager for each risk will discuss the status of that risk; however, only risks which fall in the current time period will be discussed. Risk monitoring will be a continuous process throughout the life of this project. As risks approach on the project schedule the project manager will ensure that the appropriate risk manager provides the necessary status updates which include the risk status, identification of trigger conditions, and the documentation of the results of the risk response.

Risk Mitigation and Avoidance

Once risks have been qualified, the team must determine how to address those risks which have the greatest potential probability and impact on the project. This section of the Risk Management Plan explains the considerations which must be made and the options available to the project manager in managing these risks.

The project manager has led the project team in developing responses to each identified risk. As more risks are identified, they will be qualified and the team will develop avoidance and mitigation strategies. These risks will also be added to the Risk Register and the Project Plan to ensure they are monitored at the appropriate times and are responded to accordingly. If necessary, the Risk Management Plan will be updated.

The risks for this project will be managed and controlled within the constraints of time, scope, and cost. All identified risks will be evaluated in order to determine how they affect this triple constraint. The project manager, with the assistance of the project team, will determine the best way to respond to each risk to ensure compliance with these constraints.

In extreme cases it may be necessary to allow flexibility to one of the project’s constraints. Only one of the constraints for this project allows for flexibility as a last resort. If necessary, funding may be added to the project to allow for more resources in order to meet the time (schedule) and scope constraints. Time and scope are firm constraints and allow for no flexibility. Again, the cost constraint is flexible only in extreme cases where no other risk avoidance or mitigation strategy will work.

Risk Register

Every project must maintain a risk register in order to track risks and associated mitigation strategies. This section describes the risk register criteria as well as where the risk register is maintained and how these risks are tracked in the project schedule.

The Risk Register for this project is a log of all identified risks, their probability and impact to the project, the category they belong to, mitigation strategy, and when the risk will occur. The register was created through the initial project risk management meeting led by the project manager. During this meeting, the project team identified and categorized each risk. Additionally, the team assigned each risk a score based on the probability of it occurring and the impact it could potentially have. The Risk Register also contains the mitigation strategy for each risk as well as when the risk is likely to occur.

Based on the identified risks and timeframes in the risk register, each risk has been added to the project plan. At the appropriate time in the plan—prior to when the risk is most likely to occur—the project manager will assign a risk manager to ensure adherence to the agreed upon mitigation strategy. The each risk manager will provide the status of their assigned risk at the bi-weekly project team meeting for their risk’s planned timeframe.

The Risk Register will be maintained as an appendix to this Risk Management Plan.

How to Create a Project Risk Management Plan

By Kate Eby | February 27, 2023

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Teams can use a project risk management plan to identify and assess the potential risks to a project. We’ve gathered expert tips on creating an effective risk management plan, as well as step-by-step instructions for creating an example plan.

On this page, you’ll find information on what to include in a project risk management plan and how to create a plan , as well as step-by-step instructions for completing an example project risk management plan .

What Is a Project Risk Management Plan?

Project teams create a project risk management plan , a document that helps identify and assess potential risks to a project. The plan outlines how your team will analyze and mitigate the potential risks to ensure project success.

The project risk management plan is one of the most important documents in project risk management . You can learn more about project risks in general — as well as specific types of project risks — in our comprehensive guides

What Does a Risk Management Plan Cover?

A risk management plan should cover a number of areas detailing potential project risks and how your team will deal with them. It will include a description of the project, along with how your team will identify and assess risk.

At a minimum, your project risk management plan should include the following details:

• Project description, including its purpose
• The team plan for identifying, logging, and assessing potential risks
• How the team will identify broad categories of risk
• How the team will evaluate the severity of each potential risk
• How your team will continue to monitor risks throughout the project
• How team members will be assigned as owners of various risks
• Your organization’s tolerance for certain risks, along with criteria for a risk being too large to accept

“A risk management plan defines how the risks for a project will be handled to ensure that the project can be completed within the set timeframe,” says Veniamin Simonov, Director of Product Management at NAKIVO , a backup and ransomware recovery software vendor. “The plan should cover methodology, risk categorization and prioritization, a response plan, staff roles, and responsibility areas and budgets.”

“The risk management plan will address ‘What are we going to do? How are we going to do it? What are the processes we're going to follow?’” says Alan Zucker, Founding Principal of Project Management Essentials . “It may include things such as what are the major categories you're going to use to define your risks. It might also include some guidelines for assessing risks.”

Components in a Project Risk Management Plan 

A project risk management plan will include certain components and describe how your project team will use certain tools to understand and manage potential risks. Some components include a risk register, a risk breakdown structure, and a risk response plan.

Here are components or tools that a project risk management plan often includes or describes:

• Risk Register: A risk register is the document your project team will use to identify, log, and monitor potential project risks.
• Risk Breakdown Structure: A risk breakdown structure is a chart that allows your team to identify broad risk categories and specific risks that fit within each category. Your team can decide on the broad categories, depending on your project.
• Risk Assessment Matrix: A risk assessment matrix is a chart matrix that allows teams to score the severity of potential risks based on both the likelihood of each risk happening and the impact to the project if a risk happens.
• Risk Response Plan: A risk response plan is a document that details how your team plans to respond to each potential risk to try to either prevent it from happening or lessen the impact if it does happen. You can learn more about project risk mitigation . 
• Roles and Responsibilities: The risk management plan can provide details on the project risk management team, including the lead member for risk management. It also likely details the roles and responsibilities each team member will have in addressing and dealing with specific risks.
• Risk Reporting Formats: The risk management plan describes how the project team will document and report its work on monitoring and dealing with risks. It describes the risk register format that the team will use. It might also describe how risks will be added to or deleted from the register and how the project team will provide periodic summarized risk reports to top project and organization leaders.
• Project Funding and Timing: The plan will likely have a section describing the overall funding and timing for the project. That section also likely details funding for all project risk management work.

To determine what you need to include in your risk management plan, see the following requirements based on project size:

An Organization’s Risk Management Plan Often Doesn’t Change with Projects  

Many risk management experts emphasize that an organization’s project risk management plans might not change much from project to project. That’s because the plan sets out particulars that will be followed for all projects.

“Remember, it's just an approach document that answers the question: How?” says Kris Reynolds, Founder and CEO of Arrowhead Consulting in Tulsa, Oklahoma. “The company or the department as a whole should have a single risk management plan that gets built as you're building your project management methodology. And it’s your Bible. It’s your guidebook. 

“But it isn't going to change across projects,” Reynolds continues. “What changes are the artifacts, including the risk register. But your approach of how you're going to address risk or analyze risk or plan for risk is in the project risk management plan document. As a company or organization, you create that document, and it exists for a year or two years without changing.”

To create a project risk management plan, your team should gather important documents and decide on an approach for assessing and responding to risks. This process involves gathering support documents, listing potential risk management tools, and more. 

Consider some of these basic steps and factors as you begin creating the project risk management plan:

• Gather Supporting Documents: Gather and read through supporting documents related to the overall project, including the project and project management plan. It’s important for your project risk team to have a full view of project goals and objectives.
• Frame the Context: Make sure your team understands both the business value of the project and the impact on the organization if the project fails.
• Decide on Risk Assessment Criteria: Decide how your team will identify and assess important risks. That will require your team to have an understanding of which types of risks your organization can tolerate and which risks could be ruinous to the project.
• Inventory Possible Risk Management Tools: Make a list of risk management tools and documents that your team might use to help identify and manage project risk.
• Known Risks: At the start of a project, team members will be able to identify a number of known risks , such as budget issues, shortages of material, and human and other resource constraints, which are measurable and based on specific events. 
• Unknown Risks: At the start of a project, team members will not be able to identify a range of unknown risks that could impact your project. Those risks are not as easily or objectively measurable as known risks and can crop up at any point during a project. A main goal of project risk management is to help your team discover and address unknown risks before they happen.
• Unknowable Risks: Your team will not be able to anticipate unknowable risks that could affect the project, such as catastrophic weather events, accidents, and major system failures.
• Understand Human Bias: Studies have shown that people overestimate their ability to predict and influence the future. We often think we have more control than we do. Those biases can affect how we assess and manage risks in a project. We tend to give too much credence to what happened with past processes, fall into agreement with others in our group, and be more optimistic than we should be about how long a project will take or how much it will cost.  It’s important to account for all of those biases as your team identifies and assesses project risk.

Steps in Developing a Project Risk Management Plan

After your project team has gathered documents and done other preparation work, you will want to follow nine basic steps in creating a project risk management plan. Those start with identifying and assessing risks.

Here are details on the nine steps of project risk management to keep in mind while drafting your project risk management plan:

• Identify Risks: Your team should gather information and request input from team and organization members to determine potential risks to the project. Some specific risks can threaten many projects. Other risks will vary, based on the type of project and the industry. “If you're talking about a software project, you could have risks associated with the technology, resources, and interdependencies with other systems,” says Zucker. “If you have vendors you're working with, there may be risks associated with the vendors. There may be risks that are software- or hardware-specific. If you're working on a construction project, those risks obviously would be very different. ”You can learn more about project risk analysis and how to identify potential risks to a project .
• Assess Potential Impact of Each Risk: After your team identifies potential risks, it can assess the likelihood of each risk, along with the expected impact on the project if the risk happens. Your team can use a risk matrix to identify both the likelihood and impact of each risk. You can learn more about how to create a risk matrix and assess risks .
• Determine Your Organization's Risk Threshold and Tolerance: Your team will want to understand your organization’s risk threshold , or tolerance for risk. Organization leaders might decide that some risks should be avoided at all costs, while others are acceptable. Take the time to understand those views as you prioritize project risks.
• Prioritize Risks Based on Impact and Risk Tolerance: Once your team assesses the potential impact of a risk and your organization's risk tolerance for risks, it will prioritize risks accordingly. “Prioritize risks based on their disruptive potential for an organization,” says Simonov.
• Create a Risk Response Plan: Your team should then create a response plan for each risk that the team considers a priority. That response plan will include measures that could prevent the risk from happening or lessen the risk’s impact if it does happen.
• Select Project Risk Management Tools: Your team will need to decide on the best risk management tools to use for your project. That will likely include a risk register and a risk assessment matrix. It might include other tools, such as Monte Carlo simulations. Learn more about various tools and documents to use in risk management . 
• Select an Owner for Each Risk: Each identified risk should have an assigned owner. In some cases, a department might be an owner of a risk, but most often, the team will assign individuals to monitor risks. In some cases, the owner will be responsible for dealing with the risk if it happens. Teams can list the owners of each risk on their project risk register. 
• Determine Possible Triggers for Each Risk: As your team conducts a closer assessment of all risks, it should identify risk triggers where possible. Triggers are events that can cause a risk to happen. Your team won’t be able to identify triggers for all risks, but it will for some. For example, if you have a plant without sufficient backup power, a trigger could be warnings of a violent storm that could cause a power outage.
• Determine How Your Team Will Monitor Risks: An important part of your plan includes recording concrete details about how your team will ensure that it can continually monitor risks throughout the life of a project.

Risk Management Plan Examples, Templates, and Components

Examples of project risk management plans can help your team understand what information to include in a plan. The risk management plan can also detail various components that will be part of your team’s risk management.

Project Risk Management Plan Template

Download the Sample Project Risk Management Plan Template for Microsoft Word  

Download this sample project risk management plan, which includes primary components that might be described in a project risk management plan, such as details on risk identification, risk mitigation, and risk tracking and reporting.

Download the Blank Project Risk Management Plan for Microsoft Word

Use this blank template to create your own project risk management plan. The template includes sections to ensure that your team covers all areas of risk management, such as risk identification, risk assessment, and risk mitigation. Customize the template based on your needs.

Project Risk Register Template

Download the Sample Project Risk Register for Excel

This sample project risk register gives your team a better understanding of the information that a risk register should include to help the team understand and deal with risks. This sample includes potential risks that a project manager might track for a construction project.

Download the Blank Project Risk Register Template for Excel  

Use this project risk register template to help your team identify, track, and plan for project risks. The template includes columns for categorizing risks, providing risk descriptions, determining a risk severity score, and more.  

Quantitative Risk Register Template

Download the Sample Quantitative Project Risk Impact Matrix for Excel

This sample quantitative project risk impact matrix template can help your team assess a project risk based on quantitative measures, such as potential monetary cost to the project. The template includes columns where your team can assess and track the probability and potential cost of each project risk. The template calculates a total monetary risk impact based on your estimates of probability and cost.

Risk Breakdown Structure Template

Download the Risk Breakdown Structure Template for Excel

Your team can use this template to create a risk breakdown structure diagram that shows different types of risks that could affect a project. The template helps your team organize risks into broad categories.

Step-By-Step Guide to Creating a Project Risk Management Plan

Below are step-by-step instructions on how to fill out a project risk management plan template. Follow these steps to help you and your team understand the information needed in an effective risk management plan.

This template is based on a project risk management plan template created by Arrowhead Consulting of Tulsa, Oklahoma, and was shared with us by Kris Reynolds.

• Cover Section: Provide information for the cover section , also known as the summary section . This will include the name of the project, the project overview, the project goals, the expected length of the project, and the project manager.
• Risk Management Approach: Write a short summary of your organization's overall approach to project risk management for all projects, not only the project at hand. The summary might describe overall goals, along with your organization’s view of the benefits of good project risk management.
• Plan Purpose: Write a short summary explaining how the plan will help your team perform proper risk management for the project.
• Risk Identification: Provide details on how your team plans to identify and define risks to the project. Those details should include who is assigned to specific responsibilities for risk identification and tracking, as well as what information and categories will be included in your team’s project risk register.
• Risk Assessment: Provide details on how your team will assess the probability and potential impact of each risk it has identified. Your team should also include details on any risk matrices it plans to use and how the team will prioritize risks based on those matrices.
• Risk Response: Provide details on the ways your team can choose to respond to various risks. In the case of high-priority risks, that will include prevention or mitigation plans for each risk. In the case of low-priority risks, or risks that might be prohibitively expensive to mitigate, it might include accepting the risk with limited mitigation measures.
• Risk Mitigation: Provide more details on how your team plans to lessen the likelihood  or impact of each risk. Your team should also provide details on how it will monitor the effectiveness of prevention and mitigation strategies, and change them if needed.
• Risk Tracking and Reporting: Provide details on how your team plans to track and report on risks and risk mitigation activities. These details will likely include information on the project risk register your team plans to use and information on how your team plans to periodically report risk and risk responses to organizational leadership.

Do Complex Projects Require More Complex Project Risk Management Plans? 

Experts say that complex projects shouldn’t require more complex project risk management plans. A project might have more complex tools, such as a more detailed risk register, but the risk management plan should cover the same basics for all projects.

“The problem is, most people get these management plans confused. They then start lumping in the artifacts [such as risk registers] — which can be more complex and have more detail — to the risk management plan itself,” says Reynolds. “You want it to be easily understood and easily followed.

“I don't think the complexity of the project changes the risk management plan,” Reynolds says. “You may have to circulate the plan to more people. You may have to meet more frequently. You may have to use quantitative risk analysis. That would be more complex with more complex projects. But the management plan itself —  no.”

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9 Free Risk Management Templates for Excel

If there’s one thing you can be certain of when managing a project, it’s change. If only you knew ahead of time what those issues would be, you could better address them. Although it’s impossible to predict the future, with these free risk management templates, you can better prepare for the unexpected and be more apt to keep your project on track.

There are many project management templates that are designed to help you identify, respond to and track those risks. This helps you avoid an issue that becomes a problem that negatively impacts the project’s time, cost and scope. Download these free risk management templates and gain more control over your project.

1. Risk Management Plan

A risk management plan is a document that describes how a project management team will manage risk over a project. Risk management plans consist of several sections that describe the potential risks of a project and the various risk mitigation strategies that will be executed to manage said risks. To provide a clear view of project risks, a risk management plan typically contains a risk register, risk breakdown structure, risk matrix and a risk mitigation plan. Our risk management plan template helps you organize these different risk management documents.

2. Risk Register Template

Planning for risk is how you manage risk. While it’s impossible to know what’ll happen, an experienced project manager will have the resources to predict what might happen. In order to define the potential of the risk from showing up in your project and what the impact could be, you’ll want to use our free risk register template for Excel .

The free risk register gives you space to describe the risk, its impact and what your response will be if it appears in the project. There’s also a column to note if the risk is high, medium or low. Plus, you can assign a team member to that risk so they know to keep an eye out for it. If that risk becomes an issue, then the team member will be responsible for tracking it until the issue has been resolved.

Or you can build your risk register in ProjectManager , a robust project management software complete with risk management and reporting tools. Build project plans with Gantt charts, execute with tasks lists and address risks alongside your project. It’s easy to identify impact, likelihood and potential resolutions. Plus, you’ll be able to centralize communications and documentation with your team as the project unfolds. Try ProjectManager today for free.

3. Project Dashboard Template

Preparing for risk is essential to risk management, but that’s just the start. Once the project begins, you have to be diligent in monitoring the work to catch issues when they arise. The faster you capture issues, the less impact they’ll have and the quicker you’ll be able to resolve them. Using our free project dashboard template for Excel creates graphs that track your tasks, workload, costs and more.

4. Risk Matrix Template

There’s more than one way to manage risk, but regardless of how you choose to do so, you’ll always want to identify, prioritize and assign an owner to be on the lookout for it. Risk isn’t always negative, of course, but if you’re not prepared for risk then you can’t mitigate or take advantage of it. Our free risk matrix template for Excel provides a visual tool to manage risk easily.

A risk matrix is a type of chart that’s used by project managers to map risks. It helps categorize the risk in terms of its likelihood of occurring and how it’ll impact the project. It does this on a colorful grid, which provides you with a visual tool that helps communicate risk to the project team.

5. Issue Tracking Template

Risk is potential, but project issues are real. They could be the manifestation of a risk that you’ve identified and have been monitoring or they could be unique. Whatever they are, you need to address them and our free issue-tracking template for Excel is just the tool you need to make sure issues don’t sidetrack your project.

The issue tracking collects all the data you need to keep an eye on the issue as it moves through its life cycle. You have a column to describe it and its potential impact. Then you can give each issue a priority to know which to deal with first as well as the date it was first identified and who’s responsible for resolving the issue . There’s space to note the department responsible and whether the status is open or closed.

6. Cost-Benefit Analysis Template

Not all risks are created equal. Project managers can get sidetracked trying to resolve a risk that’s trivial when put in the context of the larger project. But how can you tell whether the risk in the project is worth the effort? Simply download our free cost-benefit analysis template for Excel to help you decide if the effort is worth the cost.

The free template helps you collect the quantitative costs (indirect, intangible and opportunity) and compare them to the quantitative benefits (direct, indirect, intangible and competitive). With this data, you can make a cost-benefit analysis to see if the investment is worth the return.

7. Project Status Report Template

We’ve talked about project dashboards as a means to monitor for risk. Reports are another tool that provides a more detailed look at the project’s progress and performance. Use our free project status report template for Excel to view a slice of time in the project to chart its health and progress.

Some of the data a status report captures include a summary of the project, such as key accomplishments, work that has been done, what work is still to come, milestones, deliverables and action items. There’s also information on the budget, schedule, quality and scope of the project . Plus, you can see risks, issues and roadblocks.

8. IT Risk Assessment Template

IT projects have their own unique risks and, therefore, need their own unique risk assessment. There are risks to software and hardware from malware, viruses, scams and more. There are also human errors, security breaches and natural disasters that can take you offline, too. Our free IT risk assessment template for Excel is a great tool to avoid potential loss from downtime.

Everything you need to manage IT risk is included in the free template. You can list the risk by number to track it, note the area where the risk is likely to happen and define the risk. Then there’s a place to set up processes to control the risk, assess it and determine what activities will be required to reduce the risk . You can even monitor the risk if it shows up to make sure it’s properly resolved.

9. Change Log Template

Change is a risk; you don’t know when it’s coming, but you have to be able to deal with it. Whether it’s a request from stakeholders or an issue with equipment or weather, change can impact your project. If you planned correctly, then you’re ready for changes even if you’re not sure what they’ll be. When they come, though, you need our free change lot template for Excel to manage them.

The free template lets you date when the change first came, who owns it and who’s responsible for taking care of the change. There’s a place to note its priority to know what should be done and when. You can also note its status. This way, as changes come into your project (and they always do), you have a way to track them and make sure nothing crucial is overlooked.

More Project Management Templates

Everyone likes free templates. ProjectManager has dozens of free project management templates for Excel and Word that are ready to be downloaded on our site. You can find more than free templates that deal with risk. There are ones that cover every phase of your project and below is only a small sampling.

Gantt Chart Template

The Gantt chart is one of the most popular scheduling tools in project management. Use our free Gantt chart template for Excel to list all your tasks and see them on a visual timeline. It’s a great way to organize your costs and resources.

Project Plan Template

Project plans allow project managers to scope their work and break it down into manageable parts. It’s an essential document in project management. Using our free project plan template for Word will help you organize your tasks, phases, budget and much more.

Project Budget Template

All projects require money to deliver success, and budgets capture those financial details. The more accurate the budget estimates, the more likely you’ll be able to complete the project. Using our free project budget template for Excel will help you accurately forecast costs.

ProjectManager Is a Risk Management Software

There’s no doubt that free project management templates are great. But they’re also status documents that must be manually updated. That’s a lot of time and effort to extend on a limited tool. ProjectManager is online project management software that delivers real-time data to help you better manage project risk.

Track Risk in Real Time

None of the free templates can track risk in real time. Someone on your team has to manually update those templates and there’s always a danger that copies are floating around so no one is aware of their actual status. Our risk management features make it easy to stay informed. You can create a risk just as you would a task and assign an owner, add dates, priorities, tags, attachments and more. Always know the status of your risk in real time.

Manage Risk on Robust Gantt Charts

Having a risk management plan is essential and templates can help but they might not be flexible enough. In some cases, you need something more dynamic. Our online Gantt charts help you schedule and assign as well as monitor the project on a timeline. You can also easily share the Gantt chart with the project team and stakeholders.

Of course, teams and stakeholders aren’t going to need the details of a Gantt chart. That’s why we have multiple project views. Teams can manage and prioritize risk on kanban boards, which visualize the workflow. Stakeholders can be updated by viewing the calendar view or using customized reports to share just the data in which they’re interested.

Related Content

If you’re still hungry to learn more about risk and how to manage it, you’re in luck. ProjectManager isn’t only great software but our site is the premier online destination for all things project management. There are more than templates. We publish weekly blogs and have guides, videos and much more. Here’s some more risk-related reading.

• The Risk Management Process in Project Management
• How to Make a Risk Management Plan
• What Is a Risk Register & How to Create One
• Risk Analysis: Definition, Examples and Methods
• Risk Breakdown Structure for Projects: A Complete Guide to RBS

ProjectManager is award-winning software that helps you plan, manage and track risk in real time. We also empower teams on a collaborative platform with task and resource management features to keep everyone working together more productively. Get onboard with teams from companies as varied as Avis, Nestle and Siemens who use our software to deliver success. Get started with ProjectManager today for free.

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7 Steps to Write a Risk Management Plan For Your Next Project (With Free Template!)

🎁 Bonus Material: Free Risk Management Template

5 Steps to Find Your Definition of Done (With Examples and Workflows)

3 Steps to Minimize Workplace Distraction And Take Back Control of your Focus

The Essential Guide to Writing a Project Communication Plan: What It Is and Why You (Actually) Need One

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• Risk Management

By Dmytro Nizhebetskyi

September 17, 2023, risk management process explained (+resources, templates).

I’ve been managing software development projects for more than 11 years. Risk management is arguably the most crucial piece in my project management approach. Therefore, I spent lots of time and effort creating a practical risk management process. 

Risk management process is a structured approach to identifying, assessing, addressing, and controlling risks. It’s a combination of processes and tools a project manager applies to discover threats and opportunities that may impact a project.

You’ll get the whole risk management process below. You can find links to other articles that explain each process and tool in more detail. So, let’s dive in!

Short Glossary of Project Risk Management

There is no such thing as a universal risk management process. Instead, you need to select tools, techniques, and processes for each project individually. Moreover, organizations often develop their own approaches to risk management that you need to follow. 

Please note that the risk management process, framework, and approach mean the same things. So, I’ll use them interchangeably.    

That’s why in simple terms, Risk Management is your effort in identifying and tackling project risks.

The  PMBOK Guide  describes a simple framework for risk management. It gave me inspiration, so credit where it’s due to the PMI.  It gives the following definition of a risk: 

“An uncertain event or condition, that if it occurs, has a positive or negative effect on a project’s objective.”

Conversely, an opportunity is an event or condition that has a positive effect. As a project manager, you need to try and leverage opportunities as much as avoiding risks.

The  “impact”  is the effect of risk or opportunity. This may change the feasibility, costs, durations, overall risk level, availability of resources, or personnel. In general, a risk may impact any aspect of the project.

We can assess a risk’s impact qualitatively as low, medium, or high.

We can also describe the impact as a monetary value of a risk like $2,450 or as a delay of four calendar days or both at once. 

But don’t limit yourself only to project costs or duration. Risks will appear in all aspects of project management and may have a complex impact. For example, a risk may impact quality, team motivation, resources, and staffing all at once. 

“Probability”  is the likelihood of a risk or opportunity happening.

Again, it can be qualitative (low, medium, high) or quantitative (a percentage).

A “risk response” or “risk response plan” details the action you will take to avoid or mitigate risk.

What are the 7 Risk Management Processes

Below is a quick overview of the risk management framework. Notice that each step of the framework is a separate process, all of which will be discussed in detail in the related articles.

Additionally, keep in mind that it’s just a framework. You can add or remove tools and techniques in each process. However, in the long run, you need to tailor your risk management approach for the given project. 

The primary consideration is the costs of your efforts.  Risk management is not free of charge.  It requires the involvement of the whole team and stakeholders. So, you need to balance your efforts with the benefits of overcoming risks.

Process #1: Plan How to Manage Risks

As with everything in project management, risk management starts with planning. There are three main reasons for this:

• Risk management requires the input of all the project documentation, processes, and workflows. You need to plan what you’ll analyze and how. 
• You don’t do risk management alone. You need input from stakeholders, so you need to know who they are and plan their engagement.
• You need to collect the assets and knowledge of your organization. This helps you to avoid reinventing the wheel.

There are too many moving parts for this to be kept in your head. So, you need a simple project risk management plan. It should cover each detailed step discussed below.

Process #2: Continuously Identify Risks

The next step is to identify risks with techniques outlined in the risk management plan, in conjunction with all the information you have at your disposal. 

We’ll talk about different risk identification techniques in detail in this article:

Risk Identification (What is it, techniques and examples)  

However, I want you to focus on one in particular that can help you kickstart the process, even if you have never done it before. It’s the analysis of risk categories. 

The only problem is that your company probably doesn’t maintain a list of risk categories.

But I’ve got you covered. In my experience, there are 43 risk categories. Take these as a starting point. Then, expand the list with categories from your industry. Finally, keep it updated throughout your career.

43 Risk Categories: Complete List of Categories of Risks (+ Explanations)

How many risks should you identify? Even on a small project, there could be up to a hundred. 

So, what should you do with all of them? First of all, you need to log them all in a risk register. But don’t evaluate them – just write them down for now!

Risk Register Example and Quick Guide (+Template)

Process #3: Perform Qualitative Risk Analysis

Qualitative risk analysis is all about assessing each risk’s impact and probability in simple terms like low, medium, or high. 

Remember, mitigating is costly: You will never work on a project that allows you to do this for every possible risk. 

That’s why the primary goal of the qualitative risk analysis is to shortlist the known risks: Those that have the most adverse impact on the project and are a distinct possibility.

Soon, hundreds of risks will be whittled down to maybe a dozen. The next step is to plan risk responses for each of them.

The others remain in a “watch list” section of the risk register. Why is this needed? The impact and probability of risks evolve during the project lifetime.

Here’s a key piece of advice: Don’t overcomplicate it!  

If you can prioritize risks using simple grades of low, medium, and high, then do so. Going beyond this is only beneficial when you have hundreds of risks or require a more complex analysis.

Qualitative Risk Analysis Example (Explanation + Template)

Process #4 (Optional): Perform Quantitative Risk Analysis

You may analyze risks further by using percentages for probability and dollars (or whatever currency is relevant) for impact.

Using these figures, you can calculate the expected monetary value (EVM) of each risk.

But, for smaller projects, this isn’t usually worth the effort required because it’s unlikely to be needed. 

In some cases, it may help you to analyze a costly and critical decision. If you are doing it for the first time, ask your peers and leadership for guidance.

Process #5: Plan How to Overcome Risks

So, now you have identified a dozen risks. What next?

• You can do something to avoid a risk.
• You can do something to reduce the impact and/or probability of a threat.
• You can do nothing, but when the threat materializes, you can use the risk reserves to minimize any negative impact.
• You can do nothing and just accept the risk and its effects. Then, you may need to adjust the project plan.

The risk response plan will help you achieve one of these results. But don’t limit yourself to a cookie-cutter solution. An efficient response plan comes from collaboration with stakeholders. 

Sometimes you need to look beyond your Gantt chart, your budget, and your team. Sometimes, informing the right people may eliminate the risk altogether.

Risk Response Strategies (Definitive Guide with Examples)

Process #6: Implement Risk Responses

Each risk response plan is a part of your project management plan:

• It’s a budget allocated for a specific risk.
• It’s a separate task someone needs to perform.
• It’s a new process you developed.

More often than not, someone needs to implement the risk response plan before a risk materializes. At the very least, this person should monitor the risk and report on the effectiveness of any response. 

But, in most cases, that shouldn’t be you because you don’t have the time to track dozens of risks. 

So, you need to do the following:

• Assign an owner to each risk. This person will monitor and work specifically on their allocated risk when the time comes.
• Communicate with stakeholders about the upcoming risks and responses you’ve planned.
• Collect data about the risks: The number of risks that did or didn’t occur, the efficiency of responses, and the impact on schedule, budget, and scope of work. Also, don’t forget about the client’s happiness.
• Identify any residual risk following your responses.

These activities are relevant across the board for all project management efforts. Each risk response is like a micro sub-project. But they are always a part of the wider project, not a stand-alone activity.

Here’s an expert tip:

Delegate ownership for implementing risk responses as much as possible.

You need to focus on the bigger picture of project progress, overall risk levels, and new sources of risks. In general, you should only tackle the risks that are in your area of expertise.

Risk Management Examples: 9 Behind the Scenes Stories (With Plans)

Process #7: Continuously Monitor Risks

When controlling risk management activities, you first need to ensure that your planned risk responses are efficient and timely.

After that, you need to keep an eye on new risks as they appear. And they do surface all the time! Likewise, known risks may change their probability and impact. These new and updated risks may challenge the feasibility of your project. 

Next, you need to control the overall risk level for the project. You should do this periodically. Then, based on your analysis, you may need to make changes to the project baselines or your risk management approach.

In essence, you need to use the same risk identification techniques over and over again.

When Does Risk Management Process Start on a Project?

Why do you need to think about risk management right at the start?

First of all, you inherit risks from the environment of your organization. Think about internal stakeholders, processes, lack of support from leadership, absence of expertise, recurring or seasonal problems. They’re all present in this environment already. 

So, here’s the good news!

The more you work in one company, the more you know about its inefficiencies and weaknesses. But rest assured that the same challenges will reappear for all new projects. Unfortunately, organizations don’t fix these problems quickly.

Second, you may participate in the pre-sales phase of a project. So, again, there’s the potential to avoid a treasury of risks from the start by adjusting stakeholders’ expectations. But you need to know how to identify and track those risks.

That’s why we need to focus on risk management from the start. You need to apply the processes and tools we discuss in this chapter throughout every aspect of the project. Risk management activities must be baked into your project plan.

Repeat this mantra after me: 

“I will perform risk management activities throughout the whole project lifetime and in between projects. It never stops.”

Secret Ingredient of Risk Management

I was sitting in the office early one morning. I’d created a perfect plan to fix a problem that I believed would appear in a few days. It was my first project. And it made me a little proud that I’d discovered a potential risk!

In a few days, it happened!

With barely concealed enthusiasm, I escalated it to management. At once, I provided my plan to overcome the problem. After a few hours of intensive meetings, senior management accepted my plan.

We solved the problem quickly and efficiently. But once everyone left, my mentor came to me. “What the hell was that?” he said.  “Fixing the consequences is a passive mindset. You should be proactive! If you knew the solution, you should have prevented the problem.”

That’s a lesson that I’ve remembered throughout my whole career. If you think about it, he was right. By discussing the problem with an expert in a quiet meeting before it arose, we could have reached the same result in a cheaper, less stressful way without troubling senior-level managers and engineers. 

So, risk management is all about preventing problems or reducing their impact on a project. 

The secret to efficient risk management is proactivity. 

What if Risks Messed up Your Project?

Following this process doesn’t safeguard you from problems:

• You may fail to identify a severe risk.
• Your risk response plan may be inefficient.
• Small risks may snowball into larger ones. 
• Some risks will be out of your control.

When a risk seriously hits your project, you need to focus your efforts on getting back to your initial plan. Don’t re-plan the whole project because that will create new risks.

But that’s the worst-case scenario. You’re unlikely to see too many risks that can instantly ruin the whole project. Even if there are, such risks are usually known, and you try to avoid them from day one by creating a prototype or performing a feasibility analysis.

In the real world, you should be worried about the compound effect of numerous small risks and risks that you failed to identify. They won’t bring your project down at once, but they’ll gradually cause delays. They will make your project owner unhappy to the point where they start questioning your competency. You definitely want to avoid that! 

That’s why I suggest you get the risk management plan template below. It will help you become an expert in risk management.

Conclusion on Risk Management

Unfortunately, this article was just  one piece of a complex project risk management framework : Many other processes happen before and after this one.

If one part doesn’t work, the whole system breaks.

My Risk Management Plan Template connects all processes and tools into one cohesive system. It also provides access to other articles and videos on risk management. 

Don’t put your projects and reputation at risk. Ensure you know how risk management works in the real world.

All successful project managers know it’s better to  learn from someone else’s experience  (aka lessons learned). Tap into my 12 years of practical IT experience and get the  Risk Management Plan Template .

[Template] Risk Management Plan

Home / Resources / ISACA Journal / Issues / 2021 / Volume 2 / Risk Assessment and Analysis Methods

Risk assessment and analysis methods: qualitative and quantitative.

A risk assessment determines the likelihood, consequences and tolerances of possible incidents. “Risk assessment is an inherent part of a broader risk management strategy to introduce control measures to eliminate or reduce any potential risk- related consequences.” 1 The main purpose of risk assessment is to avoid negative consequences related to risk or to evaluate possible opportunities.

It is the combined effort of:

• “…[I]dentifying and analyzing possible future events that could adversely affect individuals, assets, processes and/or the environment (i.e.,risk analysis)”
• “…[M]aking judgments about managing and tolerating risk on the basis of a risk analysis while considering influencing factors (i.e., risk evaluation)” 2

Relationships between assets, processes, threats, vulnerabilities and other factors are analyzed in the risk assessment approach. There are many methods available, but quantitative and qualitative analysis are the most widely known and used classifications. In general, the methodology chosen at the beginning of the decision-making process should be able to produce a quantitative explanation about the impact of the risk and security issues along with the identification of risk and formation of a risk register. There should also be qualitative statements that explain the importance and suitability of controls and security measures to minimize these risk areas. 3

In general, the risk management life cycle includes seven main processes that support and complement each other ( figure 1 ):

• Determine the risk context and scope, then design the risk management strategy.
• Choose the responsible and related partners, identify the risk and prepare the risk registers.
• Perform qualitative risk analysis and select the risk that needs detailed analysis.
• Perform quantitative risk analysis on the selected risk.
• Plan the responses and determine controls for the risk that falls outside the risk appetite.
• Implement risk responses and chosen controls.
• Monitor risk improvements and residual risk.

Qualitative and Quantitative Risk Analysis Techniques

Different techniques can be used to evaluate and prioritize risk. Depending on how well the risk is known, and if it can be evaluated and prioritized in a timely manner, it may be possible to reduce the possible negative effects or increase the possible positive effects and take advantage of the opportunities. 4 “Quantitative risk analysis tries to assign objective numerical or measurable values” regardless of the components of the risk assessment and to the assessment of potential loss. Conversely, “a qualitative risk analysis is scenario-based.” 5

Qualitative Risk The purpose of qualitative risk analysis is to identify the risk that needs detail analysis and the necessary controls and actions based on the risk’s effect and impact on objectives. 6 In qualitative risk analysis, two simple methods are well known and easily applied to risk: 7

• Keep It Super Simple (KISS) —This method can be used on narrow-framed or small projects where unnecessary complexity should be avoided and the assessment can be made easily by teams that lack maturity in assessing risk. This one-dimensional technique involves rating risk on a basic scale, such as very high/high/medium/low/very.
• Probability/Impact —This method can be used on larger, more complex issues with multilateral teams that have experience with risk assessments. This two-dimensional technique is used to rate probability and impact. Probability is the likelihood that a risk will occur. The impact is the consequence or effect of the risk, normally associated with impact to schedule, cost, scope and quality. Rate probability and impact using a scale such as 1 to 10 or 1 to 5, where the risk score equals the probability multiplied by the impact.

Qualitative risk analysis can generally be performed on all business risk. The qualitative approach is used to quickly identify risk areas related to normal business functions. The evaluation can assess whether peoples’ concerns about their jobs are related to these risk areas. Then, the quantitative approach assists on relevant risk scenarios, to offer more detailed information for decision-making. 8 Before making critical decisions or completing complex tasks, quantitative risk analysis provides more objective information and accurate data than qualitative analysis. Although quantitative analysis is more objective, it should be noted that there is still an estimate or inference. Wise risk managers consider other factors in the decision-making process. 9

Although a qualitative risk analysis is the first choice in terms of ease of application, a quantitative risk analysis may be necessary. After qualitative analysis, quantitative analysis can also be applied. However, if qualitative analysis results are sufficient, there is no need to do a quantitative analysis of each risk.

Quantitative Risk A quantitative risk analysis is another analysis of high-priority and/or high-impact risk, where a numerical or quantitative rating is given to develop a probabilistic assessment of business-related issues. In addition, quantitative risk analysis for all projects or issues/processes operated with a project management approach has a more limited use, depending on the type of project, project risk and the availability of data to be used for quantitative analysis. 10

The purpose of a quantitative risk analysis is to translate the probability and impact of a risk into a measurable quantity. 11 A quantitative analysis: 12

• “Quantifies the possible outcomes for the business issues and assesses the probability of achieving specific business objectives”
• “Provides a quantitative approach to making decisions when there is uncertainty”
• “Creates realistic and achievable cost, schedule or scope targets”

Consider using quantitative risk analysis for: 13

• “Business situations that require schedule and budget control planning”
• “Large, complex issues/projects that require go/no go decisions”
• “Business processes or issues where upper management wants more detail about the probability of completing on schedule and within budget”

The advantages of using quantitative risk analysis include: 14

• Objectivity in the assessment
• Powerful selling tool to management
• Direct projection of cost/benefit
• Flexibility to meet the needs of specific situations
• Flexibility to fit the needs of specific industries
• Much less prone to arouse disagreements during management review
• Analysis is often derived from some irrefutable facts

THE MOST COMMON PROBLEM IN QUANTITATIVE ASSESSMENT IS THAT THERE IS NOT ENOUGH DATA TO BE ANALYZED.

To conduct a quantitative risk analysis on a business process or project, high-quality data, a definite business plan, a well-developed project model and a prioritized list of business/project risk are necessary. Quantitative risk assessment is based on realistic and measurable data to calculate the impact values that the risk will create with the probability of occurrence. This assessment focuses on mathematical and statistical bases and can “express the risk values in monetary terms, which makes its results useful outside the context of the assessment (loss of money is understandable for any business unit). 15  The most common problem in quantitative assessment is that there is not enough data to be analyzed. There also can be challenges in revealing the subject of the evaluation with numerical values or the number of relevant variables is too high. This makes risk analysis technically difficult.

There are several tools and techniques that can be used in quantitative risk analysis. Those tools and techniques include: 16

• Heuristic methods —Experience-based or expert- based techniques to estimate contingency
• Three-point estimate —A technique that uses the optimistic, most likely and pessimistic values to determine the best estimate
• Decision tree analysis —A diagram that shows the implications of choosing various alternatives
• Expected monetary value (EMV) —A method used to establish the contingency reserves for a project or business process budget and schedule
• Monte Carlo analysis —A technique that uses optimistic, most likely and pessimistic estimates to determine the business cost and project completion dates
• Sensitivity analysis —A technique used to determine the risk that has the greatest impact on a project or business process
• Fault tree analysis (FTA) and failure modes and effects analysis (FMEA) —The analysis of a structured diagram that identifies elements that can cause system failure

There are also some basic (target, estimated or calculated) values used in quantitative risk assessment. Single loss expectancy (SLE) represents the money or value expected to be lost if the incident occurs one time, and an annual rate of occurrence (ARO) is how many times in a one-year interval the incident is expected to occur. The annual loss expectancy (ALE) can be used to justify the cost of applying countermeasures to protect an asset or a process. That money/value is expected to be lost in one year considering SLE and ARO. This value can be calculated by multiplying the SLE with the ARO. 17 For quantitative risk assessment, this is the risk value. 18

USING BOTH APPROACHES CAN IMPROVE PROCESS EFFICIENCY AND HELP ACHIEVE DESIRED SECURITY LEVELS.

By relying on factual and measurable data, the main benefits of quantitative risk assessment are the presentation of very precise results about risk value and the maximum investment that would make risk treatment worthwhile and profitable for the organization. For quantitative cost-benefit analysis, ALE is a calculation that helps an organization to determine the expected monetary loss for an asset or investment due to the related risk over a single year.

For example, calculating the ALE for a virtualization system investment includes the following:

• Virtualization system hardware value: US$1 million (SLE for HW)
• Virtualization system management software value: US$250,000 (SLE for SW)
• Vendor statistics inform that a system catastrophic failure (due to software or hardware) occurs one time every 10 years (ARO = 1/10 = 0.1)
• ALE for HW = 1M * 1 = US$100,000
• ALE for SW = 250K * 0.1 = US$25,000

In this case, the organization has an annual risk of suffering a loss of US$100,000 for hardware or US$25,000 for software individually in the event of the loss of its virtualization system. Any implemented control (e.g., backup, disaster recovery, fault tolerance system) that costs less than these values would be profitable.

Some risk assessment requires complicated parameters. More examples can be derived according to the following “step-by-step breakdown of the quantitative risk analysis”: 19

• Conduct a risk assessment and vulnerability study to determine the risk factors.
• Determine the exposure factor (EF), which is the percentage of asset loss caused by the identified threat.
• Based on the risk factors determined in the value of tangible or intangible assets under risk, determine the SLE, which equals the asset value multiplied by the exposure factor.
• Evaluate the historical background and business culture of the institution in terms of reporting security incidents and losses (adjustment factor).
• Estimate the ARO for each risk factor.
• Determine the countermeasures required to overcome each risk factor.
• Add a ranking number from one to 10 for quantifying severity (with 10 being the most severe) as a size correction factor for the risk estimate obtained from company risk profile.
• Determine the ALE for each risk factor. Note that the ARO for the ALE after countermeasure implementation may not always be equal to zero. ALE (corrected) equals ALE (table) times adjustment factor times size correction.
• Calculate an appropriate cost/benefit analysis by finding the differences before and after the implementation of countermeasures for ALE.
• Determine the return on investment (ROI) based on the cost/benefit analysis using internal rate of return (IRR).
• Present a summary of the results to management for review.

Using both approaches can improve process efficiency and help achieve desired security levels. In the risk assessment process, it is relatively easy to determine whether to use a quantitative or a qualitative approach. Qualitative risk assessment is quick to implement due to the lack of mathematical dependence and measurements and can be performed easily. Organizations also benefit from the employees who are experienced in asset/processes; however, they may also bring biases in determining probability and impact. Overall, combining qualitative and quantitative approaches with good assessment planning and appropriate modeling may be the best alternative for a risk assessment process ( figure 2 ). 20

Qualitative risk analysis is quick but subjective. On the other hand, quantitative risk analysis is optional and objective and has more detail, contingency reserves and go/no-go decisions, but it takes more time and is more complex. Quantitative data are difficult to collect, and quality data are prohibitively expensive. Although the effect of mathematical operations on quantitative data are reliable, the accuracy of the data is not guaranteed as a result of being numerical only. Data that are difficult to collect or whose accuracy is suspect can lead to inaccurate results in terms of value. In that case, business units cannot provide successful protection or may make false-risk treatment decisions and waste resources without specifying actions to reduce or eliminate risk. In the qualitative approach, subjectivity is considered part of the process and can provide more flexibility in interpretation than an assessment based on quantitative data. 21 For a quick and easy risk assessment, qualitative assessment is what 99 percent of organizations use. However, for critical security issues, it makes sense to invest time and money into quantitative risk assessment. 22 By adopting a combined approach, considering the information and time response needed, with data and knowledge available, it is possible to enhance the effectiveness and efficiency of the risk assessment process and conform to the organization’s requirements.

1 ISACA ® , CRISC Review Manual, 6 th Edition , USA, 2015, https://store.isaca.org/s/store#/store/browse/detail/a2S4w000004Ko8ZEAS 2 Ibid. 3 Schmittling, R.; A. Munns; “Performing a Security Risk Assessment,” ISACA ® Journal , vol. 1, 2010, https://www.isaca.org/resources/isaca-journal/issues 4 Bansal,; "Differentiating Quantitative Risk and Qualitative Risk Analysis,” iZenBridge,12 February 2019, https://www.izenbridge.com/blog/differentiating-quantitative-risk-analysis-and-qualitative-risk-analysis/ 5 Tan, D.; Quantitative Risk Analysis Step-By-Step , SANS Institute Information Security Reading Room, December 2020, https://www.sans.org/reading-room/whitepapers/auditing/quantitative-risk-analysis-step-by-step-849 6 Op cit Bansal 7 Hall, H.; “Evaluating Risks Using Qualitative Risk Analysis,” Project Risk Coach, https://projectriskcoach.com/evaluating-risks-using-qualitative-risk-analysis/ 8 Leal, R.; “Qualitative vs. Quantitative Risk Assessments in Information Security: Differences and Similarities,” 27001 Academy, 6 March 2017, https://advisera.com/27001academy/blog/2017/03/06/qualitative-vs-quantitative-risk-assessments-in-information-security/ 9 Op cit Hall 10 Goodrich, B.; “Qualitative Risk Analysis vs. Quantitative Risk Analysis,” PM Learning Solutions, https://www.pmlearningsolutions.com/blog/qualitative-risk-analysis-vs-quantitative-risk-analysis-pmp-concept-1 11 Meyer, W. ; “Quantifying Risk: Measuring the Invisible,” PMI Global Congress 2015—EMEA, London, England, 10 October 2015, https://www.pmi.org/learning/library/quantitative-risk-assessment-methods-9929 12 Op cit Goodrich 13 Op cit Hall 14 Op cit Tan 15 Op cit Leal 16 Op cit Hall 17 Tierney, M.; “Quantitative Risk Analysis: Annual Loss Expectancy," Netwrix Blog, 24 July 2020, https://blog.netwrix.com/2020/07/24/annual-loss-expectancy-and-quantitative-risk-analysis 18 Op cit Leal 19 Op cit Tan 20 Op cit Leal 21 ISACA ® , Conductin g a n IT Security Risk Assessment, USA, 2020, https://store.isaca.org/s/store#/store/browse/detail/a2S4w000004KoZeEAK 22 Op cit Leal

Volkan Evrin, CISA, CRISC, COBIT 2019 Foundation, CDPSE, CEHv9, ISO 27001-22301-20000 LA

Has more than 20 years of professional experience in information and technology (I&T) focus areas including information systems and security, governance, risk, privacy, compliance, and audit. He has held executive roles on the management of teams and the implementation of projects such as information systems, enterprise applications, free software, in-house software development, network architectures, vulnerability analysis and penetration testing, informatics law, Internet services, and web technologies. He is also a part-time instructor at Bilkent University in Turkey; an APMG Accredited Trainer for CISA, CRISC and COBIT 2019 Foundation; and a trainer for other I&T-related subjects. He can be reached at [email protected] .

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Risk Management Template

What is risk in isms 27001.

Risk is defined as the probability of suffering harm or loss. In the context of information security, risk is the potential for unauthorised access, use, disclosure, interception, or destruction of data. Data risk can be classified into three categories: confidentiality risk, integrity risk, and availability risk. In order to assess and manage risks to data, organisations need to understand the threats and vulnerabilities that exist. Furthermore, organisations need to be aware of the value of their data and the impact that a security breach would have on their operations. To effectively manage risks, organisations need to have policies and procedures in place that address all three categories of risk.

Confidentiality risk is the potential for unauthorised access, use, or disclosure of data. This type of risk can be mitigated by implementing security controls that protect against unauthorised access, such as encryption and access control measures.

Integrity risk is the potential for data to be altered or destroyed in an reauthorized manner. This type of risk can be mitigated by implementing security controls that protect against unauthorised modification, such as data backups and intrusion detection systems. Availability risk is the potential for data to be unavailable when needed. This type of risk can be mitigated by implementing security controls that ensure data availability, such as disaster recovery plans .

Explain Risk Management Methodology in ISMS 27001?

Risk management is a vital part of any organisation's information security management system (ISMS), as it helps identify, assess and respond to risks to the confidentiality, integrity and availability of information. There are many different risk management methodologies, but in this blog post we will focus on the methods used in ISMS 27001. This standard, published by the International Organisation for Standardisation (ISO) , is a widely used framework for information security management systems.

The risk management process in ISMS 27001 consists of four steps:

• Identify the risks.
• Analyse the risks.
• Evaluate the risks.
• Treat the risks.

Let's take a closer look at each of these steps.

1. Identify the risks

The first step in risk management is to identify the risks to the confidentiality, integrity and availability of information. There are many ways to identify risks, but some common methods include:

• Reviewing past security incidents
• Conducting security audits and assessments
• Analysing organisational business processes and operations
• Reviewing changes to the organisational environment, such as new technologies or business partners

2. Analyse the risks

Once the risks have been identified, they need to be analysed in order to determine their impact and likelihood. This step helps organisations prioritise the risks and decide how to respond to them.

3. Evaluate the risks

The next step is to evaluate the risks in order to decide which ones need to be treated. This evaluation involves considering the impact and likelihood of each risk and determining whether the risk is acceptable or not.

4. Treat the risks

The final step in risk management is to treat the risks that have been identified as unacceptable. There are many ways to treat risks, but some common methods include:

• Implementing security controls.
• Changing organisational policies and procedures.
• Training employees.
• Conducting exercises and simulations.

What is the Difference Between Risk Assessment, Risk Management and Risk Analysis?

Risk assessment, risk management, and risk analysis are all important for businesses when it comes to managing potential risks. But what exactly is the difference between these three concepts? Here's a look at each one in more detail.

1. Risk Assessment

A risk assessment is a process of identifying and evaluating risks to a company or organisation. It involves analysing the potential for loss, determining the likelihood of an event occurring, and estimating the possible financial impact of that event. A risk assessment can be used to identify and prioritise risks so that they can be managed effectively.

2. Risk Management

Risk management is the process of identifying, assessing, and controlling risks to an organisation. It includes developing plans to deal with potential hazards and implementing controls to minimise the impact of those hazards. Risk management also involves monitoring risks and modifying plans as necessary to ensure that they remain effective over time.

3. Risk Analysis

Risk analysis is a process of examining a company or organisation's exposure to risk. It involves identifying potential sources of risk and estimating the likelihood and severity of those risks. Risk analysis can be used to help make decisions about how best to manage risks.

List Out The Some of the Related Documents in Risk Management ISMS 27001?

Risk management is a critical component of any information security management system (ISMS). The ISO 27001 standard defines risk management as "the systematic application of management policies, procedures and practices to the tasks of identifying, analysing, evaluating, treating and monitoring risk." There are several documents that are related to risk management in an ISMS. Here are some of the most important ones: The risk management plan: This document outlines the approach that will be taken to manage risks in the ISMS.

• The risk register: This document lists all the risks that have been identified and provides a status for each risk.
• The risk treatment plan: This document outlines the actions that will be taken to mitigate or eliminate the risks that have been identified.
• The security controls: This document lists all the security controls that have been implemented in the ISMS.
• The incident response plan: This document outlines the steps that will be taken in the event of a security incident.
• The Security Incident Management Procedure , which sets out the steps to be taken in the event of a security incident.
• The Information Security Policy , which provides an overview of the organisation's approach to information security.

List Out The Benefits of Risk Management ISMS 27001?

Risk management is crucial for any organisation that wants to protect itself from potential risks. One way to manage risks is to implement an information security management system (ISMS) based on the ISO 27001 standard. An ISMS can help an organisation identify, assess, and control its information security risks. In this blog post, we'll list some of the benefits of implementing an ISMS.

1. Helps you identify information security risks

An ISMS can help you identify potential information security risks that could threaten your organisation. It does this by requiring you to analyse your organisation's processes, assets, and systems. This analysis can help you identify weaknesses and vulnerabilities that could be exploited by threats.

2. Helps you assess information security risks

Once you've identified potential risks, an ISMS can help you assess those risks. It does this by requiring you to consider the likelihood and impact of each risk. This assessment can help you prioritise risks and decide which ones need to be addressed first.

3. Helps you control information security risks

Once you've assessed the risks, an ISMS can help you control them. It does this by requiring you to implement controls that address the most important risks. These controls can range from technical measures (such as firewalls and encryption) to organisational measures (such as user training and incident response plans).

4. Provides a framework for continuous improvement

An ISMS is not a document of policies and procedures, checklists and standard operating procedures (although it may contain these in whole or part). Instead, an ISMS provides a framework which describes Organisational Policy, offers guiding principles for Information security risk management and improvement efforts.

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Project Risk Management checklist | FREE Download

• The 20 one-off checks you must make at project start-up.
• 8 essential checks for an effective Risk Register.
• 5 ongoing checks you need to do manage your risks.
• A document you can edit and share with ease.
• Contents of the template
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• Download the Risk Management Checklist
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The contents of the Risk Management Checklist

Field description and tips to complete, project details and document control.

• Project Name and Reference
• Document information: ID, owner, issue date, last saved date, file name or path
• Document history: version, issue date, changes.
• Document approvals: role, name, signature, date

Project Start-up

One time activities.

• 1. Is your approach to managing risk defined in a Risk Management Plan ?
• 2. Has the Risk Management Plan been reviewed and approved by the appropriate sign-off authority?
• 3. Have the roles and responsibilities for managing risks been clearly defined?
• 4. Is there a process in place to regularly review and update the Risk Register
• 5. Are risk monitoring and control mechanisms established to track the status and progress of identified risks .
• 6. Is there a communication plan in place to share risk information with relevant stakeholders ?
• 7. Has the Risk Management Plan been integrated into other project management processes, such as planning, scheduling , and budgeting?
• 8. Are there mechanisms in place to capture and document lessons learned from past risk events or projects ?
• 9. Are there mechanisms to ensure ongoing training and awareness of risk management principles and practices?
• 10. Are there procedures in place for reporting and escalating risks to the appropriate levels of management?
• 11. Does the Risk Management Plan include provisions for continuous improvement and refinement of risk management processes?
• 12. Have you scheduled Risk Workshops with your Project Team and stakeholders to brainstorm and identify potential risks ?
• 13. Have you identified who is responsible for maintaining the Risk Register ?
• 14. Does the Project Team know what to do if they identify a risk ?
• 15. Is the Risk Register accessible to all Project Team members?
• 16. Has the Risk Register been shared, or its location communicated to the Project Team and appropriate stakeholders ?
• 17. Is there a process for confirming Risk Owners and making sure that they are clear on their responsibilities?
• 18. Is there an agreed format for writing risk descriptions? For example, ‘there is a risk that x will happen if y’.
• 19. Are the Project Team trained on the difference between risks and issues?
• 20. Is there a process and form for documenting details about specific high priority risks ? For example, a Risk Data Sheet Template or a Risk Mitigation Report .

Project Delivery

Risk register checks.

• 1. Is every risk clear and understandable?
• 2. Are there mitigating actions for each risk ?
• 3. Is there a contingency plan in place for each risk ?
• 4. Does each risk have a rating for severity, impact, and proximity?
• 5. Are there actions / next steps for each risk ?
• 6. Has each risk been reviewed in the last week?
• 7. Have high severity, high impact risks been shared with the project board /sponsor?
• 8. Does each risk have a named Risk Owner who is clear on their responsibilities?

Iterative, ongoing activities

• 1. Is the Risk Register being updated as specified in the Risk Management Plan ?
• 2. Are the Project Status Reports used to keep the Project Board / Sponsor and Stakeholders updated on the progress of mitigating actions?
• 3. Are the Project Team updated on the status of open risks via regular team meetings?
• 4. Is the project manager notified of all risks regardless of the perceived size or impact?
• Are all risk responses considered when reviewing new risks? In other words don't just consider reducing the likelihood of a risk occuring.

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Project Risk Management Process, Tools & Templates

Published: September 14, 2022

Updated: June 22, 2024

The role of a project manager can be a difficult one. Ensuring your project is meeting crucial benchmarks, keeping resource expenditures under budget, and juggling personnel difficulties are all part of the job. Risk management in project management, however, is one of the most important tasks of a project manager. In order to be successful in your position, your mastery of the project risk management process is one of the most essential project management skills.

Effectively implementing this process is the first line of defense in identifying and planning for project-crippling threats, capitalizing on success-boosting opportunities, and keeping your specific program afloat in potentially dangerous waters.

While this risk management process can be quite complicated, we've put together a comprehensive guide to getting the most out of your risk management strategy.

Table of Contents

What Is Risk Management?

Project risk management process, risk identification, qualitative risk analysis, quantitative risk analysis, risk response technique, risk monitoring & control, project risk management templates, project risk management: an integral part of project management.

In order to define risk management in project management, it's essential that we first look at what exactly risk itself really is.

According to the Project Management Body of Knowledge (PMBOK ® ) Guide from the Project Management Institute, "risk" is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect on a project's objectives."

It's worth noting here that while most people may think of risks solely as being negative in nature, the term "risk" as defined by PMI could also be used to describe a positive effect on a project's final outcome.

These two different types of risks, positive risks, and negative risks, are often referred to as "opportunities" and "threats," respectively.

When opportunities are identified early in the lifecycle of a project and capitalized on effectively, they can significantly improve the end results.

When identified too late in the process, however, the beneficial impacts are usually outweighed by the costs required to alter the scope and trajectory of the project.

Planning, then, is essential in order to capitalize on opportunities.

Similarly, threats must also be identified early on in order to ensure a successful project. When spotted too late, a threat can end up derailing a project entirely, possibly resulting in a significant change to scope, heavy loss of resources, or even the abandonment of a project entirely. If recognized early on, however, threats can be avoided as long as they are properly tracked.

Having a process in place that identifies and monitors these risks, then, can be essential to both preventing the failure of a project as well as further improving the project's final outcome as well.

This process is known as risk management.

In addition to selecting the perfect project management methodology , practicing comprehensive and detail-oriented risk management is one of the best indicators of a project's overall success.

The process of risk management in project management consists of five distinct phases:

In addition to the numerous general tools at your disposal as a Project Manager, there are also a wide variety of risk-specific tools and strategies that you can take advantage of to make the project risk management process far more successful.

We've included a number of these tools and strategies along with each phase of the risk management process to help you become even more effective at managing risk.

Step one of the project risk management process is to identify risks early on in the life of a project. While it is impossible to predict every single risk to a project in most cases, running through the individual threats and opportunities for each phase of a project can help you spot risks early on.

Tools & Techniques

The fishbone technique identifies a possible significant project impact and works backward to identify potential causes which branch off to the sides. The resulting diagram resembles a fishbone.

Flow charts, cause and effect diagrams, and more can help you visualize the impacts a risk can have on a project.

The primary goal of qualitative risk analysis is to determine which risks are a high priority and which are not. Determining the significance of each individual risk allows you to allocate a proportional number of resources toward its management. What's more, taking into account the urgency of each will also help you plan your project risk management process more effectively.

The traditional model for risk prioritization, the RAG diagram is a simple way to categorize each threat to the success of a project in easy-to-understand terms.

Taking into account the time factor in how you prioritize your risks can help you allocate resources to only the most immediate threats, and plan for those ahead.

Categorizing risks by their type can help you coordinate damage mitigation strategies that more effectively neutralize multiple risks.

While qualitative risk analysis gives a general indication of the urgency of individual risks, a quantitative analysis is numerically-driven and is usually much more complex.

As such, they'll often take longer to complete and may even require correspondence with additional stakeholders as well.

A decision tree is a great visualization of the possible impacts of project risk as well as a numerical representation of how each decision will affect the success of a project.

Identifying complete failure points is the aim of this technique. It can help you focus your resources on the most crucial problems at hand.

This technique requires you to create two models: one of the projects without the risk occurring and one of the projects with the risk. It can help show the severity of the situation should a threat or opportunity arise.

Depending on the risk in question, threats and opportunities may require a specific response should they arise during the course of a project.

Determining which response or which sequence of responses should be applied beforehand is essential to mitigating the damage of a threat or capitalizing on the rewards of an opportunity.

Frequent status reports are necessary to safeguard against the project unknowingly slipping into a risk trigger so that proper steps can be taken to handle a risk appropriately.

Keeping track of the effectiveness of risk responses can help improve your risk strategies over time while also making note of risks encountered for similar projects in the future.

Below are some of the best project risk management templates we've found to date. They can help you organize your risk management approach to make sure that your strategy is organized, comprehensive, and easy to navigate.

1. Project Risk Management Templates from Freelance Project Management Services

These two templates tackle two different but equally important parts of the risk management process. The Project Risk Management Plan Template provides the description of the risk management activities (including their structure and how they will be performed throughout the project lifecycle). This template comes in a word processing format (.dotx or .docx) as well as PDF. The Risk Register Template handles the issue of recording the status and finite details of risks (e.g. monetary impact, probability of occurrence, specific triggers). It provides an overarching dashboard of the risks that may impact the success of the project at large. It is available via .xltx, .xlsx, or .pdf format.

2. The Operational Risk Scorecard from My Excel Templates

This simple yet massively effective approach to risk management provides a number of categories you can use to evaluate the true potential impact of a number of risks, all in a clear and easy-to-use template. It provides sheets for both competitive and operational risks as well as areas for incident costs, probabilities, mitigation strategies, and more. This useful template is available in Excel format.

3. The Project Risk Management Plan & Risk Management Log Templates by the CDC

These risk management templates get right to the point. They are highly structured, comprehensive, and easy to navigate and use. The Centers for Disease Control and Prevention CDC offers two templates that might be of use: a formal Risk Management Plan template as well as a Risk Management Log template. These can be used respectively for documenting specific measures to take in the event an issue actually occurs and to record the specific details surrounding a particular risk.

4. The Risk Register Template from ProjectManager.com

A clean and crisp template, the Risk Register Template from ProjectManager.com helps you define risk priorities and note the potential impact of each risk as well. It also contains areas devoted to the particular response that an individual risk calls for as well as the risk owner so you can quickly locate the party responsible for handling it. A simple design to be sure, but it works well for smaller projects where less detail is required.

Whether you are new to the world of project management or are a seasoned veteran, these project risk management templates will prove instrumental in mitigating risks in your projects and ensuring their success.

In addition to risk management, there are a wide variety of additional project management templates that can help you manage timesheets, stay on top of your budget, and track issues as well.

We encourage anyone looking to streamline their project management process to utilize these templates to their full capacity as well.

Effective project risk management is a necessary and crucial factor in whether or not a project is deemed a resounding success or a disastrous failure. And as with most other aspects of project management, planning is absolutely critical when it comes to either mitigating threats or capitalizing on opportunities.

The tools and techniques outlined above will undoubtedly help you plan a risk management strategy that ensures the full success of each of your projects.

In addition to the other numerous benefits of doing so, consider earning your PMP Certification to improve your mastery over risk management even further.

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Risk Management Process Template

Identify project objectives.

Identify Potential Risks

• 1 Technical risks
• 2 Financial risks
• 3 Operational risks
• 4 Legal risks
• 5 Environmental risks

Assess Risk Impact

Assess probability of risk event, rank risks based on severity, approval: risk ranking.

• Rank Risks Based on Severity Will be submitted

Develop Risk Mitigation Strategies

• 1 Avoidance
• 3 Acceptance
• 4 Reduction
• 5 Monitoring

Assign Responsibility for Risk Management

Prepare risk management plan, secure resources for risk mitigation, implement risk mitigation strategies, monitor and review risk management success.

• 3 Quarterly

Approval: Risk Management Plan

• Prepare Risk Management Plan Will be submitted

Update Risk Management Plan as Necessary

Conduct post-project risk review.

• 1 Improve risk identification process
• 2 Enhance risk mitigation strategies
• 3 Strengthen risk monitoring and review
• 4 Provide additional training and resources
• 5 Establish a risk management culture

Document Lessons Learned

Communicate risk management results to stakeholders, approval: risk management results.

• Communicate Risk Management Results to Stakeholders Will be submitted

Close Risk Management Process

Take control of your workflows today., more templates like this.

Construction Risk Assessment Template for Excel

Assessing risks in construction projects is essential for spotting potential hazards and addressing them before they become bigger issues. Using a Construction Risk Assessment Template can help you do this in an organized and thorough way. It saves time, ensures you cover all the important points, and keeps everything consistent. Plus, it helps make sure you don’t miss any critical risks and makes the whole process smoother and more efficient.

Written by:

Dr. Moina Rauf

Dr. Moina Rauf, fluent in English and Dutch, is a distinguished writer and editor with a PhD in Economics and a Bachelor’s degree in English Literature and Economics. With extensive experience in both academia and industry, she excels in elucidating complex concepts about business management, human resources policies, legal documentation, employee leaves, appointments, contracts, and workplace culture. Her proficiency in analyzing and simplifying intricate documents ensures comprehensive understanding for her audience. Published in academic journals, Dr. Rauf’s authority in her field is well-established.

Construction projects, ranging from residential buildings to large-scale infrastructure developments, have a profound impact on communities by creating jobs, enhancing connectivity, and fostering innovation. Given their significant scale and volume, construction activities often involve substantial investments and complex logistics. Consequently, the inherent risks associated with construction projects can have far-reaching implications, affecting safety, financial stability, regulatory compliance, and project timelines. Therefore, a comprehensive risk assessment is essential to identify, evaluate, and mitigate potential hazards which ensures not only the safety and well-being of workers and the public but also the successful and timely completion of the projects.

This article discusses the essential aspects of risk assessment for construction projects. It highlights the importance of maintaining safety, managing costs, and ensuring timely completion. You’ll learn about different types of risk assessments and their specific roles in addressing potential hazards. Additionally, it introduces a practical free risk assessment template designed to simplify risk management with automated calculations and visual aids. We will also explore common challenges in construction, provide effective strategies for overcoming them, and help you navigate projects more easily and successfully.

• What is Construction Risk Assessment

Construction risk assessment is a critical process in the construction industry. It encompasses a systematic approach to understanding risks, implementing measures to mitigate them, and ensuring the safety and success of the project. A good risk assessment will cover the following areas:

• Ensuring the safety of workers, contractors, and the public by identifying and mitigating potential hazards.
• Minimizing financial losses due to accidents, delays, or unexpected costs.
• Adhering to local, national, and international regulations and standards to avoid legal repercussions.
• Enhancing the likelihood of project completion on time, within budget, and to the required quality standards.
• Types Of Risk Assessments

Effective risk management in construction projects requires a variety of risk assessments tailored to specific needs and scenarios. Each type serves a unique purpose and application, ensuring comprehensive safety and risk mitigation.

Below are detailed descriptions of common types of risk assessments, along with their unique purposes and applications:

Baseline risk assessment

A baseline risk assessment establishes a comprehensive understanding of the general risks associated with a construction project. This type of assessment is conducted at the initial stage of a project to identify all potential hazards. Evaluating various factors, such as machinery risks, environmental conditions, and site-specific hazards, lays the groundwork for effective risk management strategies.

Issue-based risk assessment

Issue-based risk assessment focuses on specific issues or changes within the project that may introduce new risks. This assessment is performed whenever significant changes occur in the project scope, processes, or materials. Examples include introducing new machinery or technology, changing construction methods, or using different materials. 

Continuous risk assessment

Continuous risk assessment involves ongoing monitoring and evaluation of risks throughout the project lifecycle. It is carried out regularly to identify emerging risks and ensure existing controls remain effective. This includes regular safety inspections, audits, and continuous monitoring of work conditions. By maintaining dynamic risk management, this type of assessment allows for real-time responses to new hazards and ensures that safety standards are upheld consistently throughout the duration of the project, thus minimizing the risk of accidents and incidents.

The construction industry accounts for 4.1% of the US GDP, demonstrating its substantial contribution to economic growth and development. 

Construction Risk Assessment Template

• How To Use The Construction Risk Assessment Template

Below is a detailed explanation of the sections of this template and guidance on how to use it:

In this section of the template, you will need to input detailed information about the project’s unique identifier, name, manager, assessors, approvers, description, and relevant dates.

Use the Probability and Impact Scales, which feature a standardized 1 to 5 scale, to assess the likelihood and severity of each risk. The Probability Key ranges from 1 (Highly Unlikely) to 5 (Almost Certain), while the Impact Key ranges from 1 (Insignificant) to 5 (Catastrophic).

In this section, you can assign each risk a unique reference ID, describe it concisely, and categorize it by the project phase and potential impact. This structured documentation will facilitate targeted mitigation strategies.

This section of the risk assessment template is essential for evaluating and categorizing risks based on their probability and impact. This section provides a systematic approach to quantify and prioritize risks. Each risk is assessed for its probability, which is measured on a scale from 1 to 5, using the Probability Key (1 = Highly Unlikely, 2 = Unlikely, 3 = Possible, 4 = Likely, 5 = Almost Certain). Similarly, the impact of each risk is measured on a scale from 1 to 5, according to the Impact Key (1 = Insignificant, 2 = Minor, 3 = Moderate, 4 = Major, 5 = Catastrophic). The risk score is then calculated by multiplying the probability and impact values.

Based on the calculated score, each risk is categorized into one of five levels: Low, Moderate, High, Very High, and Extreme. You can select the risk level from the dropdown menu according to the key provided at the beginning of the template. It is vital to remember that the configuration sheet is connected to the risk level and status fields, and you can easily change these options by following the comprehensive instructions provided in the configuration sheet.

Furthermore, these risk levels are color-coded for quick visual identification (Low = Blue, Moderate = Teal, High = Green, Very High = Yellow, Extreme = Red). This color-coding facilitates the immediate recognition and prioritization of high-priority risks and can be modified according to your preferences. The dropdown menus in the main sheet for risk status and levels help standardize data entry.

The risk levels determined in this section inform the Risk Mitigation and Control Measures section, where specific strategies for addressing each risk are documented.

In this section of the template, you can document specific strategies for mitigating or controlling each identified risk. This section allows you to write detailed descriptions of the mitigation measures, outline specific action plans, assign responsible action owners, and track the current status and completion dates. Regular updates to these fields ensure that all mitigation efforts are tracked and kept up-to-date.

The data from the section related to risk scores feeds into the graph at the start of the template, which provides a visual representation of the risk distribution, updating automatically to reflect the most recent data. This visual tool offers a clear and immediate overview of the project’s risk landscape and aids you in swift decision-making and response.

Overall, this template offers you a comprehensive and user-friendly approach to risk management, ensuring thorough documentation, accurate assessments, and effective mitigation measures.

• Common Challenges In Construction Projects

When it comes to construction projects, there’s a lot that can go wrong. From financial hiccups to unexpected site conditions, managing a construction project is no small feat. To help you navigate these challenges, let’s break down some of the most common risks you might face along the way. Whether you’re a seasoned pro or new to the field, understanding these risks can make a world of difference in keeping your project on track.

Financial risks

Construction projects often face financial risks such as cost overruns, which result from inaccurate estimates, scope changes, or unforeseen conditions. Funding issues, including difficulties in securing adequate financing or delays in payments, can halt progress and increase financial pressure. Additionally, economic conditions can fluctuate, affecting material costs, labor rates, and the overall viability of the project.

Legal and regulatory risks

Legal and regulatory risks include failure to comply with local, state, or federal regulations, which can lead to fines, work stoppages, or mandatory project alterations. Contractual disputes stemming from misunderstandings or disagreements over contract terms can result in legal battles and project delays. Furthermore, obtaining necessary permits and approvals can be delayed which can disrupt project timelines as well.

Project management risks

Project management risks encompass scheduling delays caused by poor planning or unforeseen factors such as weather and supply chain issues. Inefficient resource allocation, including the improper use of labor , equipment, and materials, can impede project progress. Ineffective communication among stakeholders often leads to misunderstandings, errors, and the need for rework.

Environmental and site risks

Environmental and site risks involve unanticipated site conditions like poor soil quality, contamination, or hidden obstacles that complicate construction. Adverse weather conditions can cause delays, damage materials, and create unsafe working environments. Adherence to environmental protection regulations is also necessary, which can influence project planning and operations.

Safety risks

Safety risks are significant in construction, with sites prone to accidents that can cause injuries, fatalities, and project delays. Ensuring compliance with all safety protocols and regulations is critical to preventing accidents and maintaining a safe working environment.

Technical risks

Technical risks include design errors, which can necessitate significant rework, increasing costs, and causing delays. Ensuring the quality of materials and workmanship to meet required standards is essential to avoid future issues.

Supply chain risks

Supply chain risks involve material shortages that can halt construction and increase costs. The reliability of suppliers is crucial for the timely delivery of materials and equipment. Additionally, logistics issues, such as problems with transportation, can delay material delivery and affect project schedules.

• Best Practices for Mitigating Risk

To effectively manage and mitigate risks in construction projects, it is essential to adhere to a set of best practices that ensure safety, efficiency, and successful project outcomes.

• Conduct comprehensive risk assessments at the start of the project and throughout its duration. For example, evaluate risks such as supply chain disruptions or unforeseen weather conditions.
• Develop detailed project plans with clear timelines and include buffer times for potential delays. For example, add extra time to the schedule for custom-built components.
• Establish and enforce comprehensive safety procedures, including regular safety training and inspections. For instance, conduct weekly safety briefings and ensure all workers use personal protective equipment (PPE).
• Foster open communication channels among all stakeholders and use collaboration tools for effective coordination.
• Develop accurate cost estimates, monitor expenditures closely, and ensure adequate funding and timely payments.
• Stay informed about local, state, and federal regulations and obtain all necessary permits and approvals. For example, secure environmental permits if the project impacts protected areas.
• Plan and allocate resources efficiently, and use technology to track their usage and availability. 
• Establish strict quality standards for materials and workmanship, and conduct regular inspections. 
• Integrate advanced technologies like Building Information Modeling (BIM) and use innovative construction techniques. 
• Conduct thorough site assessments to identify environmental issues and plan to mitigate any adverse conditions. For instance, implement drainage solutions if the site is in a floodplain.

To effectively manage the complexities of construction projects, it is crucial to implement a robust risk assessment strategy. This article highlights the significance of various risk assessments—baseline, issue-based, and continuous—in safeguarding project safety, financial health, and overall success.

This detailed risk assessment template gives a structured approach to risk documentation and management. With features such as automated calculations and visual charts, it enhances the accuracy and efficiency of risk evaluation.

Addressing common challenges—including financial, legal, and safety risks—through best practices and comprehensive risk management techniques is essential for successful project execution. As the construction industry continues to evolve, adopting comprehensive risk management strategies will remain essential to addressing uncertainties and optimizing project outcomes.

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