Question

A risk that you might not initially think of is a facility fire. To help with this risk, business purchase insurance, which covers them in case of a multitude of issues. In that scenario, the risk is absorbed by the insurance company, who will pay to replace or rebuild the facility, should something like a fire occur. What type of risk response is this?(1 point) Responses Accept Accept Mitigate Mitigate Avoid Avoid Transfer

Answer 1

The type of risk response described in your scenario is **Transfer**. By purchasing insurance, the business transfers the financial risk of a facility fire to the insurance company, which will cover the costs associated with the loss.