In risk management, what is the term for the absolute removal of risk?

Prepare for the Proactive Licensing Test by engaging with comprehensive multiple choice questions and flashcards that deliver detailed hints and explanations. Master key concepts and ace your exam!

The term for the absolute removal of risk is referred to as risk avoidance. This strategy involves taking steps to eliminate potential risks entirely, which can be achieved by choosing not to engage in activities that present those risks. For example, a company may decide not to launch a new product in a volatile market to avoid the financial risks associated with product failure.

In contrast, other options like risk transfer involve shifting the risk to another party, such as through insurance; risk retention means accepting the risk but managing its consequences; and risk reduction focuses on minimizing the impact or likelihood of a risk without completely eliminating it. Thus, risk avoidance directly addresses the goal of completely removing the risk itself.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy