Risk Assessment Matrix

The Risk Assessment Matrix is a tool used to evaluate and prioritize risks based on their probability of occurrence and the impact they would have if they occurred. It helps businesses and project managers identify which risks need immediate attention and which can be monitored over time.

At a very high level, the Risk Assessment Matrix is used in the context of business, project management, risk management.

Risk Assessment Matrix quadrant descriptions, including examples
Want to try this template?
Other Templates

What is the Risk Assessment Matrix?

A visual explanation is shown in the image above. The Risk Assessment Matrix can be described as a matrix with the following quadrants:

  1. High Probability, High Impact: Critical risks requiring immediate action. Example: A key supplier going bankrupt.
  2. Low Probability, High Impact: Severe risks that need close monitoring. Example: Natural disasters in a region with company facilities.
  3. High Probability, Low Impact: Manageable risks with routine procedures. Example: Frequent minor software bugs.
  4. Low Probability, Low Impact: Minimal risks that can be accepted. Example: Rare and minor customer complaints.

What is the purpose of the Risk Assessment Matrix?

The Risk Assessment Matrix is a fundamental tool in risk management, particularly useful in business and project management contexts. It is a 2x2 matrix that categorizes risks based on two dimensions: the probability of occurrence (likelihood) and the impact (severity) of the risk. The matrix is divided into four quadrants, each representing a different level of priority for addressing the risks.

The top-left quadrant (High Probability, High Impact) represents the most critical risks that require immediate action. These risks are likely to occur and would have a significant negative impact on the project or business.

The top-right quadrant (Low Probability, High Impact) includes risks that, while unlikely to occur, would have severe consequences if they did. These risks should be monitored closely and have contingency plans in place.

The bottom-left quadrant (High Probability, Low Impact) contains risks that are likely to occur but would have a minor impact. These risks should be managed with routine procedures and regular monitoring.

The bottom-right quadrant (Low Probability, Low Impact) represents the least critical risks. These risks are unlikely to occur and would have minimal impact. They can often be accepted or monitored periodically.

By using the Risk Assessment Matrix, businesses can prioritize their risk management efforts, allocate resources more effectively, and improve their overall risk mitigation strategies.

Want to try this template?

What templates are related to Risk Assessment Matrix?

The following templates can also be categorized as business, project management, risk management and are therefore related to Risk Assessment Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

How can I use Risk Assessment Matrix in Priority Matrix?

You can get Risk Assessment Matrix in your Priority Matrix in just a moment:

  1. Click to sign in or create an account in the system
  2. Start adding your items to the matrix
  3. If you prefer it, download Priority Matrix and take your data with you

Learn more about Risk Assessment Matrix, and get free access to lots of other templates, at templates.app. Once you are comfortable with the document, you can easily export to Excel, if you prefer to work that way.

If you have any questions and you can't find the answer in our knowledge base, don't hesitate to contact us for help.