How to Write Good Risk Statement

Last updated: 2025-07-17

What is a Risk Statement?

  • A risk statement is how you clearly describe or name a potential risk when documenting it. It ensures that anyone reading it understands exactly what the risk is.
  • Well-written risk statements help improve understanding, support sound decision-making, and make your risk management efforts more effective. On the other hand, poorly worded risk statements can lead to confusion, poor choices, and ultimately result in wasted time, money, or even business setbacks.

How to Write Effective Risk Statements for Your Business

First, it's crucial to understand and differentiate between the risk itself, its underlying cause, and its potential impact. This distinction helps prevent misunderstandings and creates a clearer picture of your business's vulnerabilities.

An effective risk statement clearly outlines three key elements:

  • The Cause: What triggers the risk or why it might happen.
  • The Risk Event: The actual undesirable event that, if it occurs, could affect your business.
  • The Business Impact: The consequences or what will happen if the risk materializes.

By structuring risks as clear statements, your team can ensure better understanding and communication. For example:

"A cyber attack on Server 1 could stop the production line, resulting in a daily loss of $530,000."

how to write clear risk statement

How to Record Risks in Your Risk Register

  1. Access your Risk Register.
  2. Create a new risk entry.
  3. Enter the risk description as the Risk Name or Title.
  4. If the risk description is extensive, use the 'Description' or 'Details' field for full details.
how to put risk statement into risk catalog