Risk Management Techniques for Information Security
Question
Your company is covered under a liability insurance policy, which provides various liability coverage for information security risks, including any physical damage of assets, hacking attacks, etc.
Which of the following risk management techniques is your company using?
Answers
Explanations
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A. B. C. D.B.
The risk management technique that the company is using in this scenario is "Risk Transfer."
Risk transfer is a risk management technique that involves transferring the risk to another party. In this case, the company has transferred the financial risk of information security incidents to the insurance company by purchasing liability insurance.
Liability insurance is a type of insurance that protects a company against claims of negligence, errors, and omissions. In the event of an information security incident that results in physical damage of assets, hacking attacks, or other types of liabilities, the insurance company will pay for the damages up to the limits specified in the policy.
By transferring the risk to the insurance company, the company can reduce its financial exposure to potential losses from information security incidents. The company still has a responsibility to implement adequate security measures to prevent these incidents from occurring, but the cost of the damages will be borne by the insurance company rather than the company itself.
In contrast, risk avoidance would involve avoiding the activities that pose the risk altogether. Risk acceptance would involve accepting the risk and its consequences without taking any additional steps to manage or mitigate it. Risk mitigation would involve implementing controls to reduce the likelihood or impact of the risk.
