Risk management is a cyclic process. But for a project, it cannot go on for ever. Right? Project manager, his team & management has to find a stop point on further assessment & responses. Those risks that remain even after developing responses to the project’s primary (or original) risks are called as Residual Risks.
Impact of residual risks are usually actively accepted. The project team has to document & monitor these risks throughout the project as they may occur anytime. Contingency plans & fallback plans are created to handle the situation when these risks occur.
Residual Risks are termed sometime as ‘Known Unknowns’ i..e these are identified risks(‘known’) but their impact is ‘unknown’ and it is accepted.
