Question

During a risk assessment, it was discovered the location where the company would like to build a data center in subject to a large number of hurricanes. Management decided to purchase an insurance policy which will pay out in the event the data center is destroyed by a hurricane. This is an example of:

Answer 1

risk transfer

Step-by-step explanation:

Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.