What is risk transference?

Question

• A strategy whose goal is to eliminate the risk of loss by stopping the action or behavior that leads to it.
• A strategy that reduces risk by minimizing the chance that the loss occurs or reduces the value lost.
• A strategy where the risk of loss is shared with another person, entity or group.
• A strategy that accepts that the amount at risk is worth the risk taken or that the cost of risk mitigation is too high.

Answer 1

Risk transference is a strategy where the risk of loss is shared with another person, entity, or group. It involves transferring the financial responsibility of potential losses to an insurance company or another party through contractual agreements. This strategy allows an individual or organization to mitigate the impact of a potential loss by transferring the risk to another party who may be in a better position to absorb or manage it.