Understanding types of risk

The checklist of risk categories may help you to think about the full range of risks you face (e.g. reputational, financial).

Category of risk Relating to…
Infrastructure Infrastructure such as transport systems for staff, power supply systems, suppliers, business relationships with partners, dependency on internet and email
Economic Economic factors such as interest rates, exchange rates, inflation
Legal and regulatory Laws and regulations which if complied with should reduce hazards (e.g. Health and Safety at Work Act)
Environmental Issues such as fuel consumption, pollution
Political Possible political constraints such as change of government
Market Issues such as competition and supply of goods
Act of God / natural perils Issues such as fire, flood, earthquake
Budgetary Availability of resources or the allocation of resources
Fraud or theft Unproductive loss of resources
Insurable Potential areas of loss which can be insured against
Capital investment Making appropriate investment decisions
Liability Right to sue or to be sued in certain circumstances
Policy Appropriateness and quality of policy decisions
Operational Procedures employed to achieve particular objectives
Information Adequacy of information used for decision making
Reputational Public reputation of the organisation and consequent effects
Transferable Risks which may be transferredTransfer of risks at inappropriate cost
Technological Use of technology to achieve objectives
Project Project planning and management procedures
Innovation Exploitation of opportunities to make gains
Human Resources
Personnel Availability and retention of suitable staff
Health and safety Well-being of people
Source: HM Treasury (2001). The Orange Book. Management of risk – a strategic overview. HM Treasury, London.