Hazard Identification & Risk Assessment

The next step is to identify hazards and assess the risk. This step entails gathering information about current capabilities and possible hazards and emergencies, and conducting an analysis to determine your capacity to handle them.

To identify the potential hazards/emergencies faced, list all the hazards/emergencies that could affect your business.(Your local Emergency Management Agency can assist you). Typically these fall into one of three categories; natural hazards, technological hazards, and other types of hazards. Be imaginative. Consider all emergencies that could occur in your community, areas adjacent to your facility and those that could occur in your facility. If you determine some hazards do not present a threat to your business, you can eliminate them in the process. Other factors to consider are below.

Historical - What types of events have occurred in the past?
Human Error - What emergencies can be caused by employee error? Are employees trained to work safely? Do they know what to do in an emergency?
Physical - What types of emergencies could result from the design or construction of the facility? Are there adequate and appropriate facilities for storing combustibles? Are evacuation routes and exits clearly identified and free of obstructions?

Once you have identified all the possible hazards, you need to rate the probability of the events considering the frequency and severity. When rating the hazards, use a simple system such as low, medium or high, or a scoring system of 1 to 5. For the next part of the analysis you need to evaluate and rate the potential human impact, property impact and business impact of each of the identified hazards, taking into account any capabilities, resources, plans, policies or procedures you already have in place. When evaluating the human impact you are considering the possibility of injury or death to your employees, customers, clients or suppliers. The property impact involves the potential loss or damage to the physical structure and equipment, taking into consideration the costs to replace, repair or lease/rent facilities and equipment. Finally, when reviewing the business impact you need to evaluate the impact of the event to your critical operations and functions (i.e, employees unable to report to work, customers unable to reach the facility, interruption of critical supplies or product distribution, imposition of fines, penalties or legal costs, etc.). The Hazards and Vulnerability Analysis Form is provided to assist you in your risk assessment.

Now that you have identified the hazards your business could face and ranked your vulnerability, you know for which hazards you need to plan and you can prioritize your planning efforts based upon your vulnerability. Checklists for specific hazards have been developed and are included in the guidebook and this site (checklists). Select those which are appropriate for your business to include in your Business Continuity Plan.