Question

Which of the following is an example of a risk transfer strategy?

a) Ensuring compliance with safety standards.
b) Discontinuing a discriminatory bonus program.
c) Providing health benefits through an insurer.
d) Providing risk management training for managers.

Answer 1

A risk transfer strategy involves shifting the potential financial burden to another party. In this case, providing health benefits through an insurer is a clear example, as the company is transferring the risk of employee health costs to the insurance provider.

Step-by-step explanation:

An example of a risk transfer strategy is c) Providing health benefits through an insurer. When a company provides health benefits to its employees through an insurance company, it transfers the financial risk of employee health costs to the insurer. In contrast, ensuring compliance with safety standards, discontinuing a discriminatory program, and providing risk management training are all ways to mitigate risk rather than transfer it.