The Five Neglects of Risk Management

Here is a useful list of five "neglects" that we as risk analysts must become versed in correcting prior to disaster (Berger, Brown, Kousky, & Zeckhauser, 2009):

1. Probability neglect (consideration of probability)
2. Consequence neglect (valuation of potential benefits and losses)
3. Statistical neglect (accurate use of subjective probability and statistics)
4. Solution neglect (delineation and evaluation of all available alternatives)
5. External risk neglect (incorporation of all benefits and costs accruing to the decision maker)

Catastrophes can and should be instructive for future practice...

Source: Berger, A, Brown, C, Kousky, C, & Zeckhauser, R (2009), The Five Neglects: Risks Gone Amiss, in H Kunreuther & M Useem (Eds), Learning from Catastrophes: Strategies for Reaction and Response (pp. 83-99). Philadelphia, PA: Wharton School Publishing.