Which risk response involves shifting risk to another party, often via insurance?

• A. Avoidance
• B. Transfer
• C. Acceptance
• D. Mitigation

Answer: (B)

Shifting risk to another party is risk transfer. The idea is to move the financial consequences of a risk to someone else, typically through a contract or an insurance policy. For example, buying cyber insurance places the cost of certain losses on the insurer if a breach occurs, within the policy terms. This approach doesn’t stop the event from happening, but it reallocates the impact to another party. Other responses include avoidance (eliminate the activity causing the risk), mitigation (reduce the likelihood or impact), and acceptance (acknowledge the risk and do nothing to change it), which is why transfer is the best fit for this scenario.