In common usage, outside the insurance industry, risk analysis is the process of evaluating financial risk in a transaction or business proposition. The expression is used in the insurance industry to describe the assessment of risk for insurance purposes. The factors considered are risk of loss, injury, or other damage to the insured party. In most cases, unless the insured has some unique issue, this information is then translated to a standardized formula for charging insurance coverage.
Examples of Risk Analysis:
|We need to analyze the risks of this venture.|
A film set is charged insurance based on risk analysis for coverage.