What is Cyber Risk?
Cyber risk refers to the potential for loss, harm, or disruption due to the failure or misuse of information systems and technology. It affects organizations of all sizes — and ignoring it won’t make it go away.
Understanding your cyber risks helps you prioritize where to invest your limited time, money, and resources. It’s the first step in building cyber resilience — especially important for small and medium-sized businesses (SMBs) that may lack a dedicated IT team.
Why Risk Assessment Matters
Identifying risks before they materialize is key to staying resilient. A structured risk assessment helps prioritize efforts, justify budget, and align cybersecurity actions with real business needs.
- Improve compliance with frameworks like ISO 27001, NIST CSF, and PIPEDA
- Document threat exposure for audits, insurance, and legal readiness
- Target investments in controls where they make the biggest impact
Calculate Your Cyber Risk
Want to understand your organization’s risk level? Our interactive tool makes it easy. Choose a threat scenario, assess its likelihood and potential impact, and instantly see the calculated risk score — all in a simple, visual format.
Responding to Cyber Risk
Once a risk has been identified and scored, organizations must decide how to address it. Not every risk needs a full technical fix — but every risk does need a decision.
Accept
The risk is low enough that the organization is willing to tolerate it. Often used when the cost of mitigation outweighs the impact.
Mitigate
Take steps to reduce the likelihood or impact of the risk, such as applying patches, updating controls, or training users.
Transfer
Shift the financial impact to a third party, typically through insurance or outsourced services. Responsibility is shared.
Avoid
Eliminate the activity entirely — for example, disabling a risky feature or not collecting certain types of sensitive data.
Each response should be documented as part of your organization's risk register, with clear rationale and review dates. This demonstrates accountability and maturity — especially during audits or security reviews.
Common Cyber Risk Categories
Knowing what types of risks exist helps you assess your threat landscape more effectively. Consider these examples as a starting point:
Insider Threats
Accidental or malicious actions by employees or contractors.
Email-Based Attacks
Phishing, spoofing, or credential harvesting via email.
Unpatched Systems
Missing security updates on key infrastructure and software.
Device Mismanagement
Laptops or smartphones lacking endpoint protection or encryption.
Risk Calculation Explained
Cyber risk isn’t just for big businesses — it affects every organization, including small and medium-sized enterprises. Understanding how risk is measured helps you make better decisions to protect your systems, data, and people. At its core, risk is determined using this formula:
Risk = Likelihood × Impact
Likelihood is how probable a threat is to occur. Impact is how severe the consequences would be if it did. A small but high-impact risk might be more critical than a frequent but low-impact one.
Risk Matrix Example (3×3)
| Low Impact | Medium Impact | High Impact | |
|---|---|---|---|
| Low Likelihood | Low | Medium | Medium |
| Medium Likelihood | Medium | Medium | High |
| High Likelihood | Medium | High | Critical |
Example Scenarios
- Phishing Email to Staff — Medium likelihood × Medium impact → Medium Risk
- Ransomware via Outdated Software — High likelihood × High impact → Critical Risk
- Lost Mobile Device with MFA — Low likelihood × Low impact → Low Risk