
1
Risk
‘‘Security is more art than science. Few formulas will cover all organizations,
situations and needs, and that’s the beauty and challenge of our profession.
We are about probabilities.’’
—Richard D. Sem, CPP, Are These Truths Self-Evident? Security Management,
March 1998
WHAT IS RISK?
Risk is associated with virtually every activity one can imagine, but for the purpose
of this text, we limit the meaning of the word risk to the uncertainty of financial loss,
the variations between actual and expected resul ts, or the probability that a loss has
occurred or will occur. In the insurance industry, risk is also used to mean ‘‘the thing
insured’’—for