What is the process called that organizations use to identify potential losses and mitigate risks?

The process that organizations utilize to identify potential losses and mitigate risks is known as risk management. This encompasses a systematic approach to understanding, evaluating, and addressing various risks that a business may face, whether they are financial, operational, legal, or strategic.

Risk management involves several key steps, starting with risk assessment, which identifies and analyzes potential risks. After the assessment, the organization will determine how to prioritize these risks and develop strategies to mitigate or transfer them. This may include implementing controls, developing response plans, or obtaining insurance to cover potential losses. Therefore, risk management is an overarching process that not only identifies threats but also actively seeks to minimize their impact on the organization.

While risk assessment is an important component of risk management, it does not encompass the entire process. Loss prevention and damage control focus on specific aspects of managing risks after they have been identified, but do not reflect the comprehensive strategy of managing risk in an organization.