Page 118 - Petrosphere - Loss Control Management (LCM) Training Manual V 1.0

117 Module 14: Roles of Safety in Risk Management Loss Control Management (LCM)

Risk Ranking

• To determine the level of risk you must combine the likelihood of a hazard occurring with its
severity.
RISK = Likelihood x Severity
• There are many different methods used to determine severity and likelihood. The system I
adopted is patterned after the Likert Scale which has five levels.
LIKELIHOOD SEVERITY
Rare Insignificant
Unlikely Minor

Possible Moderate
Likely Major
Almost certain Catastrophic
Measures of Likelihood

Measures of Severity

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