Acceptable Risk:
Noun
1. A level of potential harm or loss that is considered reasonable or tolerable in a given situation or context.
2. The degree of uncertainty or danger that an individual or organisation is willing to accept in pursuit of a desired outcome or goal.
3. A concept used in various fields, such as finance, engineering, and healthcare, to assess and manage potential risks by weighing the potential benefits against the potential negative consequences.
4. The balance between the potential rewards and potential negative outcomes that individuals or organisations are willing to accept when making decisions involving uncertain or risky situations.
Example: The company’s management team carefully evaluated the acceptable risk associated with launching a new product, considering factors such as market demand, competition, and potential financial losses.
Acceptable risk refers to the level of risk that is considered reasonable and tolerable in a given situation. It is often used in the context of decision-making, where individuals or organisations must weigh the potential benefits of an action against the potential risks. Acceptable risk is subjective and can vary depending on the specific circumstances and the parties involved. In legal terms, acceptable risk may be used to determine liability and responsibility in cases where harm or injury occurs as a result of a particular action or decision. It is important for individuals and organisations to carefully assess and manage acceptable risk in order to make informed and responsible choices.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March 2024.
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