In the FAIR method, what does "Loss Event" signify?

In the context of the FAIR method, "Loss Event" signifies an actual occurrence where a risk materializes, leading to a negative impact on an asset. This definition is central to risk management, as it focuses on real incidents that result in tangible losses, whether they be financial, reputational, or operational.

By specifying that a Loss Event results from the manifestation of a risk, it emphasizes the importance of understanding and measuring the effects of risks that have already occurred, thus allowing organizations to assess their vulnerabilities and improve their risk management strategies. This concept is grounded in the practical application of risk analysis, where the aim is to quantify and mitigate potential damages that impact business assets.

The other options present concepts related to risk but do not accurately define a Loss Event. Describing a risk scenario with minimal impact does not capture the essence of what constitutes a loss. Indicating a potential risk that has not yet occurred focuses more on theoretical scenarios rather than actual loss situations. Lastly, a planned mitigation action is not a Loss Event; rather, it is part of the risk management process aimed at preventing future Loss Events.