What does the term 'effect' refer to in risk management contexts?

In risk management contexts, the term 'effect' specifically refers to the result that arises from the interaction of a hazard and the people, property, or environment impacted by it. It encompasses the consequences that follow when a risk materializes, highlighting the damage or adverse outcomes that can occur as a result of various hazards.

For example, if a company experiences a chemical spill (the hazard), the effects might include environmental damage, health risks to employees, and financial losses. Understanding the effects enables organizations to prioritize responses and develop strategies to mitigate those consequences effectively.

The other options address related but distinct aspects of risk management. The potential for harm refers to the inherent danger linked to specific hazards, while the severity of the outcome indicates how serious the effects could be if a risk were to materialize. The probability of occurrence speaks to the likelihood that a given risk may happen but does not directly define the effects resulting from that risk. Thus, focusing on 'effect' emphasizes the outcomes and impacts that are critical for understanding and managing risks effectively.