Residual risk is the combination of Consequence x Likelihood after consideration of safeguards (note: safeguards generally reduce the likelihood of a top event). Consequence is evaluated qualitatively in the range from 1: Minor … 5: Catastrophic . Frequency is defined in the range A: Not expected … E: Highly probable. The residual risk is normally allocated a colour code:
GREEN: Acceptable – no action required
YELLOW: ALARP – monitoring required, consider to reduce risk further according to BEP / RAGAGEP, if feasible
ORANGE: ALARP – take action, reduce risk further according to BEP / RAGAGEP
RED: Unacceptable – take immediate action to mitigate risk
ALARP: As low as reasonably practicable
BEP: Best Engineering Practice
RAGAGEP: Recognized And Generally Accepted Good Engineering Practice