Risk management tools are different procedures and tutorials put together to assist an organization in making informed decisions regarding their risk management procedures, the University of California explains. Risk management helps an organization identify, assess, manage and prioritize different risks associated with its overall operation. Once a risk is determined, the risk manager should develop a plan to minimize or reduce the impact of that risk. Each business or organization has specific strategies to manage those risks.
There are many types of risk management tools available, such as one that helps a business consider the factors that affect the risks the business faces, the University of California says. The tool helps the business determine the likelihood of an event, the time it takes to impact the business and the injury and financial severity.
There are a few different types of risk management plans used to mitigate a business' risks. Common risks include natural disasters, fires and workplace-related accidents, Marquette University notes. Legal risks include theft, fraud and sexual harassment.
Risk management plans are necessary to manage risks associated with business practices, such as data storage, market instability, project failures, record security and credit risks. When using risk management tools, the data that is entered must be accurate in order for the results to be effective, The University of California notes.