CRISC IT Risk Assessment Practice Question
A company decides to purchase cyber insurance to cover potential losses from a data breach. This is an example of which risk treatment option?
⚠ Common exam trap
CRISC often tests the distinction between risk transfer and risk mitigation, as candidates may incorrectly assume that buying insurance reduces the likelihood of a breach (mitigation) rather than just transferring the financial impact.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Transfer
Purchasing cyber insurance shifts the financial consequences of a data breach to a third party (the insurer) in exchange for a premium. In risk treatment terminology, this is risk transfer (also called risk sharing). The organization still owns the risk of the breach occurring, but the financial impact is contractually transferred, making 'Transfer' the correct answer.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Mitigate
Why it's wrong here
Insurance transfers the financial consequence of a breach to a third party; it does not reduce likelihood or impact, so it is transfer, not mitigation. Mitigate is tempting because controls like encryption or patching reduce risk, which is what the question's wording loosely evokes.
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Accept
Why it's wrong here
Accepting retains the risk and its financial impact; insurance transfers that impact to the insurer for a premium. Tempting because the company tolerates the residual breach likelihood, yet the loss burden moves, which defines transfer, not acceptance.
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Avoid
Why it's wrong here
Avoidance eliminates the activity generating the risk; buying insurance keeps the data-processing activity running while shifting financial loss to the insurer. Tempting because cover feels like removing exposure, yet the breach risk remains and is transferred, not avoided.
- ✓
Transfer
Why this is correct
Cyber insurance shifts the financial consequence of a breach to an insurer rather than reducing likelihood or impact through controls. This is transfer, satisfying the stem's scenario: the risk itself remains, but the loss burden is contractually moved to a third party in exchange for premiums.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
This CRISC practice question is part of Courseiva's free ISACA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CRISC exam.