In risk management, how is low frequency and low impact risk typically handled?

In risk management, low frequency and low impact risks are typically handled by managing them. Such risks occur infrequently and, when they do, their consequences are relatively minor. As a result, organizations often choose to implement control measures or policies to mitigate the risks rather than transferring them or purchasing insurance, which may not be cost-effective for infrequently occurring events.

Managing these types of risks usually involves ongoing monitoring and establishing processes that allow an organization to respond appropriately when these low-level risks materialize. This can include maintaining safety protocols, conducting regular training, or allocating resources effectively, rather than incurring additional costs associated with insurance or transfer methods designed for more significant risks.

This proactive approach not only helps in maintaining operational efficiency but also ensures that the organization does not overlook the potential occurrences of these low-frequency, low-impact events.