ISC2 CC Security Principles Practice Question
An organization decides to purchase cyber insurance to cover potential losses from a data breach. This is an example of which risk treatment strategy?
⚠ Common exam trap
Candidates often confuse risk transfer with risk mitigation — candidates see 'insurance' and think 'control,' but insurance shifts financial liability rather than reducing the probability or impact of the breach itself.
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
Purchasing cyber insurance transfers the financial impact of a data breach to a third party (the insurer) in exchange for a premium. The organization still owns the risk event, but the monetary loss is shifted to the insurer, which is the textbook definition of risk transfer.
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
Mitigation reduces likelihood or impact through controls such as encryption or access management; buying insurance changes neither, it transfers the residual financial loss to a third party. Mitigation is correct when the goal is lowering breach probability rather than compensating for it.
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Risk acceptance
Why it's wrong here
Acceptance retains the risk and its financial consequence with no transfer or control, whereas insurance contractually shifts covered losses to the insurer. Acceptance fits when the exposure is within tolerance and cheaper to absorb than to insure or remediate.
- ✓
Risk transfer
Why this is correct
Purchasing cyber insurance shifts the financial consequence of a breach to the insurer, which is the defining mechanism of risk transfer. The organisation retains the threat itself but transfers the monetary liability, directly satisfying the stem's scenario of covering potential breach losses rather than avoiding, mitigating or accepting the risk.
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Risk avoidance
Why it's wrong here
Avoidance eliminates the activity generating the risk entirely, whereas insurance retains the breach exposure and merely transfers its financial consequence to the insurer. It would be correct if the organisation ceased handling regulated data altogether to remove the loss possibility.
Go deeper
Related to this question
Learn chapter
Risk Management and Security Controls
Key term
Impact
Impact is the measure of the potential damage or harm that a risk event could cause to an organization's assets, operations, or reputation.
Key term
Risk treatment
Risk treatment is the process of selecting and implementing measures to modify risk, which can include avoiding, accepting, mitigating, or transferring the risk.
About these practice questions
This CC question is part of Courseiva's 989-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
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 ISC2 exam blueprint
This CC practice question is part of Courseiva's free ISC2 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 CC exam.