What is the process of systematically avoiding risk called?

What is the process of systematically avoiding risk called?

• A. Risk acceptance
• B. Risk avoidance
• C. Risk transfer
• D. Safeguard

Answer: (B)

Avoiding risk means choosing not to engage in activities that create risk. In risk management, this is a deliberate step to eliminate exposure by discontinuing the activity or never starting it. This differs from accepting the risk (acknowledging it and proceeding without additional controls), transferring the risk to another party (such as via insurance), or applying safeguards (controls that reduce the risk rather than remove it). So, systematically avoiding risk is risk avoidance. For example, a company might skip a high-risk project entirely to prevent potential losses, rather than trying to mitigate or insure against those losses.

Avoiding risk means choosing not to engage in activities that create risk. In risk management, this is a deliberate step to eliminate exposure by discontinuing the activity or never starting it. This differs from accepting the risk (acknowledging it and proceeding without additional controls), transferring the risk to another party (such as via insurance), or applying safeguards (controls that reduce the risk rather than remove it). So, systematically avoiding risk is risk avoidance. For example, a company might skip a high-risk project entirely to prevent potential losses, rather than trying to mitigate or insure against those losses.