The True Cost of Risk and Its Impact on Safety

Abstract

Some form of risk management is in widespread use across industry, but with an emphasis on loss avoidance techniques. Current industrial practice can be characterised and criticised with reference to real life case studies, where the tendency to underestimate the true cost of risk becomes evident It is desirable to promote risk management as one of a set of safety engineering techniques, and one which is applicable not only as a design aid but also in the post-design stage of a system’s lifespan to maintain safety standards over time and in the fact of change. To approach risk management from a safety standpoint, methods which yield a more realistic risk costing must be used, and automated decision support systems such as those being designed in the Safety Critical Systems Programme RATIFI Project (Risk Analysis Techniques In Finance and Industry) can contribute towards this.