Is Covid-19 a pure risk or business risk?

Risk Management

Mohamed Mohamed Riyadh, Riyadh, 11322, Saudi Arabia

Pure risks are these risks have only a negative outcome, according to this definition, Covid-19 is a pure risk, so it should not be identified in risk register as risk register includes business risks only.

If Covid-19 happened in your project, you have to escalate it to your organization to take the proper action.

Posted: Mar 30, 2020 7:34 AM

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Kiron Bondale Retired | Mentor| Retired Welland, Ontario, Canada

Mar 31, 2020 7:02 AM

Replying to Mohamed Mohamed

...

Agree with Eduard, "It is important to understand the concepts ".
There are two categories of risks:
• Pure risks These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like. These risks are often referred to as insurable risks.

• Business risks These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for on-the-job education. These risks are also known as speculative risks.

So, covid-19 pandemic belongs to which category?

Mohamed -

If you are referring to the pandemic itself, it is neither of those as it is NOT a risk. It is an issue. A future potential recurrence of this virus or a new pathogen might be considered a pure risk, and likely one with a higher probability than we might have assessed previously.

However, as I wrote in a separate thread, COVID-19 is a source of many possible business risks including reduced market interest for a new product, lack of sufficient healthy staffing to meet a milestone, or insufficient funding made available for a strategic project.

Kiron

Posted: Mar 31, 2020 7:42 AM

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Is Covid-19 a pure risk or business risk?

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