“My crown is called content,
a crown that seldom kings enjoy”
In ideal risk management, a prioritization process is followed whereby the risks with the greatest loss (or impact) and the greatest probability of occurring are handled first. Risks with lower probability of occurrence and lower loss are handled in descending order. In practice the process of assessing overall risk can be difficult, and balancing resources used to mitigate between risks with a high probability of occurrence but lower loss, versus a risk with high loss but lower probability of occurrence can often be mishandled.
Risk assessment is the combined effort of:
identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. risk analysis); and
making judgments "on the tolerability of the risk on the basis of a risk analysis" while considering influencing factors (i.e. risk evaluation).
In simpler terms, a risk assessment determines possible mishaps, their likelihood and consequences, and the tolerances for such events. The results of this process may be expressed in a quantitative or qualitative fashion. Risk assessment is an inherent part of a broader risk management strategy to help eliminate any potential risk-related consequences.