CRISC Risk Response and Mitigation Practice Question
An organization purchases cyber insurance to cover potential losses from data breaches. This is an example of:
⚠ Common exam trap
Many candidates confuse risk transfer with risk mitigation, thinking insurance reduces the likelihood of a breach, when in fact it only shifts the financial consequences.
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
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Risk Transfer
Purchasing cyber insurance transfers the financial risk of a data breach to the insurer, making it a classic example of risk transfer. In risk management, transfer shifts the impact of a loss to a third party (e.g., an insurance carrier) without eliminating the underlying threat or vulnerability. This aligns with the CRISC domain of Risk Response and Mitigation, where transfer is a distinct response strategy.
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 Avoidance
Why it's wrong here
Risk avoidance means eliminating the activity that generates the exposure entirely, so no breach losses could arise. Buying insurance transfers that financial impact to the insurer for a premium, which is risk transference. Avoidance would be correct if the organisation ceased the data-processing activity altogether.
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Risk Transfer
Why this is correct
Cyber insurance shifts the financial consequence of a data breach to an insurer for a premium, which is risk transfer. The organisation retains the risk itself but transfers the potential loss, unlike avoidance, reduction or acceptance.
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Risk Mitigation
Why it's wrong here
Insurance transfers the financial consequence of a breach to a third party; it does not reduce the likelihood or impact of the event itself, so it is risk transference, not mitigation. Mitigation would be the correct classification for controls such as patching, encryption or access restrictions that genuinely lower breach exposure.
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Risk Acceptance
Why it's wrong here
Purchasing insurance transfers breach losses to the insurer; acceptance means acknowledging risk and retaining it without mitigation or transfer. Acceptance is tempting because the organisation consciously decides to tolerate residual breach exposure, and it would be correct if they simply documented the risk and set aside no compensating control or cover.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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