Question 27

This represents a Transfer strategy.

Purchasing cyber insurance to address items listed on the risk register exemplifies the Transfer strategy. This approach shifts the financial burden of risk to an insurance provider, allowing the company to manage potential losses more effectively.

A) Accept

The Accept strategy involves acknowledging the risk and deciding to bear the consequences without any additional measures. This is incorrect in this context, as the company is actively mitigating financial exposure by purchasing insurance rather than simply accepting the risk.

B) Transfer

The Transfer strategy is correctly identified here, as acquiring cyber insurance transfers the financial risk associated with potential cyber incidents to the insurance company. This action enables the company to protect itself from significant losses that could arise from cyber threats.

C) Mitigate

Mitigation involves implementing measures to reduce the likelihood or impact of a risk. While purchasing insurance can be part of a broader risk management strategy, it does not directly reduce the risk itself; rather, it transfers the risk. Therefore, this option does not accurately describe the action taken.

D) Avoid

The Avoid strategy entails eliminating the risk entirely by deciding not to engage in activities that could lead to that risk. This is not applicable here, as the company is not eliminating their exposure to cyber threats but rather transferring the risk through insurance.

Conclusion

The Transfer strategy is the correct classification for purchasing cyber insurance, as it allows the company to shift the potential financial impact of cyber risks to an insurer. Other options like Accept, Mitigate, and Avoid do not accurately reflect the action of acquiring insurance, as they either involve bearing the risk, reducing its impact without transferring it, or eliminating the risk altogether.