You are the project manager of a large construction project. Part of the project involves the wiring of the electricity in the building your project is creating. You and the project team determine the

The correct answer is A. Transference. Hiring a third-party contractor (the electrician) to perform risky work is a classic example of Risk Transference. Transference shifts the negative impact of a risk to a third party - the risk does not disappear, but the financial and operational consequences now primarily fall o

Security and Privacy Governance, Risk Management, and Compliance Program

Question

You are the project manager of a large construction project. Part of the project involves the wiring of the electricity in the building your project is creating. You and the project team determine the electrical work is too dangerous to perform yourself so you hire an electrician to perform the work for the project. This is an example of what type of risk response?

Options

ATransference
BMitigation
CAvoidance
DAcceptance

How the community answered

(44 responses)

A
89% (39)
B
2% (1)
C
2% (1)
D
7% (3)

Explanation

Hiring a third-party contractor (the electrician) to perform risky work is a classic example of Risk Transference. Transference shifts the negative impact of a risk to a third party - the risk does not disappear, but the financial and operational consequences now primarily fall on the contractor (typically through contracts, insurance, warranties, or bonds). It is not Mitigation (which reduces probability or impact), not Avoidance (which eliminates the risk entirely), and not Acceptance (which involves tolerating the risk). The electrical work still gets done; the risk is simply owned by the electrician.

Topics

#Risk Management#Risk Response#Risk Transference#Outsourcing

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