Which risk mitigation strategies include outsourcing services and purchasing insurance?Select one:acceptancereductionavoidancetransfer

Identifying the Correct Option

1. Understanding the Risk Mitigation Strategies:

   • Acceptance: Acknowledging the risk and deciding to accept it without taking further action.
   • Reduction: Implementing measures to minimize the impact or likelihood of the risk.
   • Avoidance: Altering plans to sidestep the risk entirely.
   • Transfer: Shifting the risk to another party, typically through outsourcing or purchasing insurance.

2. Focusing on Outsourcing and Insurance:

   • Outsourcing: When a company outsources services, it shifts the responsibilities and risks associated with those services to an external provider, effectively transferring the risk.
   • Purchasing Insurance: Similarly, buying insurance transfers the financial risk associated with potential losses to the insurance company.

3. Conclusion:

   • Since both outsourcing services and purchasing insurance involve transferring risks to another entity, they both fall under the strategy of risk transfer.

Final Answer

Transfer