Question

Determine appropriate risk mitigation strategies to address the obstacles, impediments, and risks you have identified.

Answer 1

ANS. These strategies are balanced with efforts to reduce or eliminate the associated hazard (such as time, cost or complexity). The best mitigation strategy may lower the risk probability, the severity of outcome, or reduce the organization’s exposure to the risk. More than one mitigation strategy may be employed to attain optimal results.

The four types of risk mitigating strategies to address the obstacles, impediments, and risks you have identified. include risk avoidance, acceptance, transference and limitation.

• Avoid: In general, risks should be avoided that involve a high probability impact for both financial loss and damage.
• Transfer: Risks that may have a low probability for taking place but would have a large financial impact should be mitigated by being shared or transferred, e.g. by purchasing insurance, forming a partnership, or outsourcing.
• Accept: With some risks, the expenses involved in mitigating the risk is more than the cost of tolerating the risk. In this situation, the risks should be accepted and carefully monitored.
• Limit: The most common mitigation strategy is risk limitation, i.e. businesses take some type of action to address a perceived risk and regulate their exposure. Risk limitation usually employs some risk acceptance and some risk avoidance.