When to escalate a risk – and when to handle it yourself

Every project comes with risks. Some are small and manageable within the team; others have the potential to disrupt delivery or threaten objectives if not addressed at the right level. Knowing when to escalate a risk, and when to manage it directly, is a critical skill for project managers.

PRINCE2® provides clear guidance through its risk practice and the principle of manage by exception. By setting tolerances for time, cost, scope, quality, benefits, and risk, it ensures that project professionals understand their responsibilities and when an issue needs to be raised to higher authority.

Understanding risk management in PRINCE2

Risk management in PRINCE2 is built around a structured process: identify, assess, plan, implement, and communicate. This ensures that risks are not only spotted but also evaluated for their potential impact and likelihood, with agreed responses in place.

But risks don’t exist in isolation. How they are handled depends on agreed tolerances. These tolerances act as boundaries for decision-making, defining what the project manager can handle independently and what must be escalated to the project board or another authority.

When to handle a risk within the team

Not every risk requires escalation. In fact, many can and should be managed within the project team. Risks that fall within agreed tolerances — for example, a minor delay that can be absorbed by contingency time — are typically the responsibility of the project manager.

Common approaches include:

• Adjusting schedules or resource allocations to absorb the impact
• Applying mitigation strategies already defined in the risk management plan
• Communicating with team members and stakeholders to keep expectations aligned

By handling risks at the right level, project managers ensure efficiency and prevent senior decision-makers from becoming overloaded with issues that can be resolved locally.

When to escalate a risk

Escalation becomes necessary when a risk threatens to breach tolerances. For example, if addressing a risk would push the project beyond its budget, delay delivery beyond agreed deadlines, or reduce the quality of outputs below acceptable standards, it must be raised to the project board.

Other triggers for escalation may include:

• Risks with significant reputational or regulatory consequences
• Risks outside the project manager’s authority to resolve
• Risks that require a decision on whether to adjust the project’s business case

Escalation is all about ensuring that risks with major implications are dealt with at the right level of authority, whether that’s by the PM and within the project team, or by other stakeholders.

The role of management by exception

PRINCE2’s manage by exception principle underpins the escalation process. By setting clear tolerances, it avoids unnecessary micro-management and ensures decision-making happens at the appropriate level.

For project managers, this creates both accountability and reassurance: they have the authority to manage within boundaries, but also the clarity to know when an issue needs higher-level input. For project boards, it provides visibility only of the risks that truly matter, allowing them to focus on strategic oversight.

Practical tips for managing risk escalation

To apply risk escalation effectively in PRINCE2 projects, project managers need to combine structure with clear communication. Here are some practical ways to strengthen your approach:

Set clear tolerances early

One of the cornerstones of PRINCE2 is the principle of manage by exception, which relies on tolerances being agreed at the start of the project as explored above. Setting these tolerances early means everyone, from the project team to the project board, understands where responsibility lies and when escalation is required. Documenting these boundaries in the project initiation documentation ensures there is no ambiguity later, helping avoid disputes and unnecessary delays when risks arise.

Communicate proactively

Escalation isn’t just about responding when tolerances are breached. It’s about recognising when risks are approaching those boundaries. Proactive communication helps stakeholders stay informed and prevents surprises. Regular reporting, risk workshops, and informal updates can all be used to flag risks before they become critical. By being transparent about emerging concerns, project managers build trust and allow the project board to prepare for possible interventions.

Maintain a risk register

PRINCE2 emphasises the importance of documentation, and the risk register is a central tool in this process. By logging risks formally, project managers ensure that nothing is overlooked and that all risks can be tracked over time. A well-maintained register provides transparency across the project team and board, highlights patterns (such as recurring issues in certain areas), and gives evidence to support escalation decisions. It also helps ensure consistency in how risks are assessed and categorised, reinforcing objectivity in decision-making.

Frame escalation constructively

When escalation is required, the way risks are presented makes a big difference. Rather than passing problems upwards, project managers should frame escalations with analysis and potential solutions. For example, outlining the likelihood and impact of the risk, summarising mitigation already attempted, and proposing options for resolution enables the project board to make informed choices quickly. This approach positions the project manager as a problem-solver rather than a problem-reporter, reinforcing credibility and keeping decision-making efficient.

Keeping risks under control

Knowing how to respond appropriately to risks is key for a project manager. By applying PRINCE2’s structured approach, project managers can handle risks confidently within agreed limits, and escalate when tolerances are threatened.

This balance ensures efficiency, strengthens trust between teams and boards, and helps projects stay aligned with their business objectives.

Ready to strengthen your approach to project risk management? Explore our PRINCE2® training courses and gain the tools to apply structured risk practices, set clear tolerances, and manage escalation with confidence.