The Definition of Residual Risk

Definition of Residual Risk

Residual risk is the risk that remains after controls have been applied to a hazard. Very few hazards can be eliminated completely, so even after guards, procedures, training and personal protective equipment are in place, some chance of harm usually remains. That remaining level is the residual risk.

ISO Guide 73:2009, the international risk management vocabulary, defines residual risk as risk remaining after risk treatment. It notes that residual risk can include risks that have not been identified and is sometimes called retained risk.

Residual risk is compared with inherent risk, which is the risk before any controls are applied. The difference between the two shows how much the controls are expected to achieve. Recording residual risk is a standard part of a risk assessment.

Why Residual Risk Matters

• It shows what is being accepted: managers who approve work need to know how much risk is left, not only that controls exist.
• It drives further action: if residual risk is still too high, more controls are needed or the work should not proceed.
• It identifies critical controls: when residual risk depends heavily on one control, such as a single interlock or a permit system, that control needs extra attention and verification.
• It informs workers: people doing the job should understand the risks that remain and how to manage them.

How Residual Risk Is Assessed

Steps

• Identify the hazard and rate its inherent or current risk, often using a risk matrix.
• Select controls using the hierarchy of controls, starting with elimination and substitution, then engineering controls, administrative controls and PPE.
• Re-rate the likelihood and severity with the controls in place. Controls usually reduce likelihood more than severity. Only elimination, substitution or some engineering changes reduce severity.
• Compare the residual risk with the organization's acceptance criteria.
• Record the result, the controls it depends on and who approved it, for example in a risk register.

Be realistic about control effectiveness

Controls lower in the hierarchy depend on people doing the right thing every time. A procedure or PPE requirement should not be credited with the same risk reduction as a fixed guard or an engineering change. Residual risk ratings should reflect how well controls actually work in the field, not how well they work on paper.

Deciding Whether Residual Risk Is Acceptable

ALARP

In the UK and many other countries, residual risk is judged against the principle of reducing risk as low as reasonably practicable (ALARP). Further controls are expected unless their cost, time and effort would be grossly disproportionate to the risk reduction they achieve.

Machinery design

ISO 12100:2010, the basic safety standard for machinery design, sets out a three-step method: inherently safe design, then safeguarding and complementary protective measures, then information for use. Risks that remain after the first two steps must be communicated to users through warnings, instructions and training, so the people operating the machine know about the residual risk.

Critical controls

When a high-consequence risk is only acceptable because of one or two controls, such as a gas detector, an interlock or an isolation procedure, those controls are often called critical controls. Organizations should define what each critical control must achieve, how it will be checked and who is responsible for it, because the accepted residual risk is only valid while those controls work.

Organizational criteria

Many organizations define who can accept each level of residual risk. For example, a supervisor might accept low risk, a site manager medium risk, and only a senior executive high risk, with some risks not acceptable at any level.

Managing Residual Risk Over Time

• Verify that critical controls are in place and working through inspections, audits and maintenance.
• Monitor leading indicators, such as overdue inspections, that suggest controls are weakening.
• Re-assess when the work, equipment, people or environment change, using management of change.
• Investigate incidents and near misses to check whether the residual risk was underestimated.
• Look for new ways to reduce risk as technology and methods improve.

Example of Residual Risk

A food processor assessed the risk of workers being cut by a slicing machine during cleaning. The inherent risk was rated high. The company added an interlocked cover that stops the blade when opened, a lockout procedure for cleaning, cut-resistant gloves and training.

When the team re-rated the hazard, likelihood dropped from "likely" to "unlikely," but severity stayed at "major" because the blade could still cause a serious cut if the controls failed. The residual risk was rated medium. The plant manager accepted it on the condition that the interlock was tested every week and that the lockout procedure was audited monthly. Six months later, the company replaced the machine with a model that uses an automatic blade guard during cleaning, which lowered the residual risk further.

Frequently Asked Questions: Residual Risk

What is the difference between inherent risk and residual risk?

Inherent risk is the level of risk before any controls are applied. Residual risk is the level that remains after controls are in place.

Can residual risk ever be zero?

Rarely. Only eliminating the hazard entirely removes the risk. In most cases some risk remains, and the goal is to reduce it to a level that is acceptable and as low as reasonably practicable.

Who should accept residual risk?

Someone with the authority and resources to add further controls. Many organizations require higher levels of management to sign off as the residual risk level increases.

Should residual risk be shared with workers?

Yes. Workers should know which risks remain, which controls they rely on and what to do if those controls fail. ISO 12100 requires machine designers to communicate residual risks to users for this reason.