A risk control technique that attempts to reduce or prevent loss by transferring some or all of the risk to another organization

A risk control technique that attempts to reduce or prevent loss by transferring some or all of the risk to another organization

• A. Segregation
• B. Separation
• C. Risk Transfer
• D. Speculative Risk

Answer: (C)

Transferring risk to another organization is a risk control technique that shifts potential losses away from your organization by making another party bear some or all of the consequence. Insurance is the classic example—you pay a premium and the insurer covers specified losses. Contracts and outsourcing can also transfer risk by assigning liabilities to suppliers, vendors, or partners. The important point is that risk transfer moves financial exposure, not necessarily eliminates the risk entirely; there can be residual risk due to coverage gaps, policy limits, or exclusions. Segregation or separation reduces impact by physically or organizationally isolating assets, rather than shifting who bears the loss, and speculative risk describes risk that involves both potential gains and losses, not a transfer method.

Transferring risk to another organization is a risk control technique that shifts potential losses away from your organization by making another party bear some or all of the consequence. Insurance is the classic example—you pay a premium and the insurer covers specified losses. Contracts and outsourcing can also transfer risk by assigning liabilities to suppliers, vendors, or partners. The important point is that risk transfer moves financial exposure, not necessarily eliminates the risk entirely; there can be residual risk due to coverage gaps, policy limits, or exclusions. Segregation or separation reduces impact by physically or organizationally isolating assets, rather than shifting who bears the loss, and speculative risk describes risk that involves both potential gains and losses, not a transfer method.