Reporting Risk: Cyber Risk Insurance Lapse

A.

The correct answer is A. accepted.

Explanation: Cyber risk insurance is a type of insurance policy that provides coverage against losses and damages caused by cyber incidents such as data breaches, hacking, and other cyber attacks. When an organization decides to purchase cyber risk insurance, it transfers the risk of financial loss due to a cyber incident to the insurance company.

In the scenario described in the question, the organization allowed its cyber risk insurance to lapse while seeking a new insurance provider. This means that the organization is currently not covered by any cyber risk insurance policy and is therefore exposed to financial losses due to cyber incidents.

The risk practitioner should report to management that the risk has been accepted. Accepting risk means that the organization is aware of the potential consequences of the risk and has decided not to take any action to mitigate, transfer, or avoid it. In this case, the organization has chosen not to purchase cyber risk insurance, which means that it has accepted the risk of financial loss due to cyber incidents.

It is important for management to be aware of this situation so they can make informed decisions about how to manage the risk going forward. They may choose to take steps to mitigate the risk, such as implementing additional cybersecurity measures or seeking a new insurance provider as soon as possible. Alternatively, they may decide to accept the risk and allocate resources accordingly.