You are the project manager for a construction project. The project includes a work that involves very high financial risks. You decide to insure processes so that any ill happening can be compensated

The correct answer is A. Transfer. Purchasing insurance is a classic example of the 'Transfer' risk response strategy (A). Risk transfer shifts the financial consequence of a risk to a third party (the insurer) without eliminating the risk itself. Mitigate means reducing the probability or impact of a risk. Accept

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Question

You are the project manager for a construction project. The project includes a work that involves very high financial risks. You decide to insure processes so that any ill happening can be compensated. Which type of strategies have you used to deal with the risks involved with that particular work?

Options

ATransfer
BMitigate
CAccept
DAvoid

How the community answered

(38 responses)

A
89% (34)
B
3% (1)
C
3% (1)
D
5% (2)

Explanation

Purchasing insurance is a classic example of the 'Transfer' risk response strategy (A). Risk transfer shifts the financial consequence of a risk to a third party (the insurer) without eliminating the risk itself. Mitigate means reducing the probability or impact of a risk. Accept means acknowledging the risk and taking no proactive action. Avoid means changing the project plan to eliminate the risk entirely. Since the project manager chose to insure the high-risk work so any negative outcome is financially compensated, this is a transfer strategy.

Topics

#Risk Management#Risk Response Strategies#Risk Transfer#Insurance

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