CRISC Risk Response and Reporting Practice Question
A financial services firm's IT risk register shows that a legacy payment gateway has a high inherent risk of data breach. Management decides to purchase a cyber insurance policy that covers up to $5 million per incident, while keeping the gateway in production unchanged. Which risk response option has management chosen?
⚠ Common exam trap
The trap here is assuming that any risk response involving insurance automatically counts as risk mitigation because it reduces financial exposure, when in fact insurance transfers the financial consequence rather than reducing the underlying likelihood or 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
✓
Risk transfer
The scenario describes management choosing to keep the high-risk payment gateway in production while purchasing an insurance policy to cover financial losses. This is risk transfer because the financial impact of a potential breach is shifted to the insurer. Risk mitigation would require implementing controls to reduce likelihood or impact, avoidance would require eliminating the gateway, and acceptance would mean bearing the loss without transferring it.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Risk mitigation
Why it's wrong here
Risk mitigation reduces the likelihood or impact of a threat by implementing controls such as patching, encryption, or network segmentation. Here, management explicitly leaves the gateway unchanged and adds no technical safeguard, so the underlying exposure to a breach is not reduced. Insurance only compensates for financial loss after an event, which is a different response category than mitigation.
- ✗
Risk avoidance
Why it's wrong here
Risk avoidance eliminates the activity or asset that creates the risk altogether, such as decommissioning the legacy gateway or replacing it with a different architecture. Management chose to keep the gateway running, so the risky activity continues. Therefore, avoidance does not describe this response, even though it would remove the exposure entirely.
- ✗
Risk acceptance
Why it's wrong here
Risk acceptance means acknowledging the risk and taking no action to change its likelihood or impact, including no transfer of financial consequence. While the gateway remains unchanged operationally, the purchase of an insurance policy changes who bears the financial loss, so this is not pure acceptance. Acceptance would involve documenting the risk and funding potential losses internally without insurance.
- ✓
Risk transfer
Why this is correct
Risk transfer shifts the financial consequence of a risk to a third party, typically through insurance or contractual agreements. By purchasing a cyber insurance policy while leaving the gateway in production, management accepts the operational risk but transfers the financial impact up to $5 million to the insurer. This matches the definition of risk transfer in CRISC risk response.
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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.