The process of identifying the exposures to potential property, liability or personal losses.
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UK: The initial risk management step to identify the firm’s exposure to risk. It entails: reviewing all relevant data on business assets, activities and personnel; and checking financial statements, including the balance sheet and the loss of profit and loss accounts, to identify potential sources of loss. Other techniques include interviewing, in-house workshops, observation and preparing flow charts to show all operations of the organisation and all loss-possibility situations in the purchase-process-distribution sequence. Risk identification makes it possible to prepare a risk inventory.