Mastering Risk Management

ENTERPRISE-WIDE EVENTS AND STRATEGIC EVENTS

What is meant by an event?

Typically, the term ‘event’ is used to describe the occurrence of a risk – whether or not an actual loss is suffered by the firm. Events can be categorised as hard or soft and direct or indirect. Examples of these categories in the event of the loss of an IT system are:

• ■a direct hard event is the overtime money paid to the software and hardware engineers to restore the system – this is the money which actually flows out of the firm
• ■an indirect hard event is the extra food and hotel bills paid to feed and accommodate the software and hardware engineers while they will restore the system – this is also money which has flowed out of the firm
• ■a direct soft event is the loss ...