A formal risk response plan outlines risk response strategies and actions to address known project risks; however, not all risks can be anticipated and managed proactively. Since many risks and problems occur unexpectedly during the project, creating a contingency plan for unknown risks is a sensible thing to do. While making deliberate effort to enhance, share and take advantage of the opportunities, typical response strategies to deal with negative risks or threats to the project objectives include risk avoidance, mitigation, transfer, and acceptance.
It is essential to systematically monitor and control risks throughout the life of the project, ensure effectiveness of the already established risk response strategies, and develop appropriate responses for newly identified risks before they can affect the project. Project risks can rapidly change and as a result, the project manager and the project stakeholders must identify alternative strategies, take preventive and corrective actions, and if necessary, execute contingent responses.