A manufacturing company anticipates a critical production server failure due to a sudden fire in the data center. The team wants to measure the magnitude of potential business disruption and legal consequences to determine which safeguards to establish. Which method best helps them measure the potential fallout from these scenarios and prioritize their response?
Avoiding potential legal liability by reviewing insurance coverage
Creating multiple system backups without periodic reassessment
Cataloging damage to existing controls in a standalone spreadsheet
Evaluating the severity of expected damage using a structured method
Evaluating the severity of expected damage using a structured method mirrors the concept commonly called impact analysis. It seeks to quantify how serious events affect operations, finances, and reputation, making it the most fitting choice in this scenario. The other options focus on insurance reviews, partial documentation, and backups without structured evaluation. While these may be components of broader risk strategies, they do not directly measure or prioritize consequences based on potential damage and business needs in a systematic way.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What is impact analysis in the context of business risk management?
Open an interactive chat with Bash
How does impact analysis differ from creating backups?
Open an interactive chat with Bash
Why is insurance review not sufficient as a primary method for risk assessment?