Man made and naturally occurring risks and hazards can have an enormous impact on companies and their ability to operate. As a result, site-specific hazards with the potential to cause injury, damage facilities, or adversely affect the environment should be identified through a risk assessment and incorporated in subsequent emergency planning procedures and business continuity plans.
Company assets are continually in jeopardy from potential threatening scenarios. Once risks are identified, mitigation measures can be implemented and emergency scenarios can be addressed. The chart below offers examples of hazards, assets at risk, and potential impacts created by those threats to existing hazards.
Details of the Risk Analysis
All management levels should take an interest in their company’s risk management program. In order to plan for emergencies and mitigate as necessary, potential risks and hazards must be identified and evaluated. Risk recognition can occur through many paths, including inspections, audits, and job hazard analyses. However, a detailed risk analysis should include, but is not limited to the following:
- Identify site-specific assets: Assets are unique to each specific industry, company, and site. (See “Assets at Risk” list on the chart above)
- List hazards that corresponds with each asset:: (See “Potential Hazard” list on the chart above) Multiple hazards may be applicable to a singular asset.
- Impact and probability factors: For each hazard consider both high probability/low impact scenarios and low probability/high impact scenarios.
- Mitigation opportunities: As you assess potential impacts, identify any asset vulnerabilities or weaknesses that would make it susceptible to loss. These vulnerabilities are opportunities for hazard prevention through procedures/processes upgrades or risk mitigation.
- Probability of occurrence: Identify if the threat scenario is low, medium or high.
- Impact of scenario estimates: Identify if the impact is low, medium or high for each of the following:
- regulatory or legal
- brand image or reputation
- Overall Hazard Rating: Ready.gov suggests using a two-letter combination of the rating for “probability of occurrence” and the highest rating in for “Impact of scenario estimates”. The probability and impact severity of a risk should determine the priority level for planning and mitigation the hazard.
Evaluate each hazard rating for probability and severity resulting from an accident or emergency. The probability and impact severity should determine the priority level for correcting the hazard. The higher the probability and impact severity, the higher the emphasis should be on corrective action. With priorities in place, mitigation measures may include:
- Changes in daily processes and procedures
- Isolation and elimination of the root cause of a potential threat
- Addressing regulatory compliance issues resulting from audits
- Implementation of risk reducing engineering controls, when applicable
- Implementation of proactive administrative controls or work place practices
- Establishment of process to identify inoperable or malfunctioning equipment and machinery through systematic inspections
Companies should also consider the benefits of a business continuity plan (BCP) to counteract the impact of risks and hazards. A BCP may limit operational “down time” due to unforeseen circumstances by prioritizing the needs of core business processes and establishing recovery time objectives. In addition to constraining fiscal viability, operational impacts can be detrimental to relationships with customers, the surrounding community, and stakeholders.
Fire emergencies continue to be one of the greatest risks to facilities. For an understanding of the necessary elements in creating an effective fire preplan, download our Fire Pre-Planning Guide.