What does 'likelihood' refer to in risk assessment?

In risk assessment, 'likelihood' specifically pertains to the chance of a risk event occurring. This concept is fundamental in determining the potential frequency or probability of a risk manifesting, which directly influences how an organization prioritizes and manages various risks.

Understanding likelihood helps in quantifying risks and can dictate the urgency and scale of responses required. For instance, if a risk has a high likelihood of occurrence, it may require immediate attention and more resources to mitigate its potential impact. Conversely, risks with a low likelihood may be monitored but not addressed with the same intensity.

This focus on occurrence probability is separate from factors like the overall impact of risks, the processes involved in evaluating risk management strategies, or how stakeholders perceive risks—each of which plays a role in a comprehensive risk management framework but does not define 'likelihood' specifically.