Risk avoidance means?

Risk avoidance means?

• A. Transferring risk to insurer
• B. Sharing risk
• C. Accepting all risk
• D. Avoiding activities that could lead to loss

Answer: (D)

Risk avoidance means choosing not to engage in activities that could lead to a loss, so you eliminate exposure to that risk altogether. This approach stops the hazard before a claim could arise, rather than dealing with it after it could occur. It’s different from transferring risk to an insurer (paying a premium to shift the financial burden), risk sharing (spreading potential losses among a group), or retaining all risk (accepting and bearing losses yourself). In practice, this could mean avoiding high‑risk activities or operations to prevent a claim from being possible. In health insurance terms, it reflects taking steps to minimize the chances of a loss by steering clear of risky situations rather than outsourcing the risk through coverage.

Risk avoidance means choosing not to engage in activities that could lead to a loss, so you eliminate exposure to that risk altogether. This approach stops the hazard before a claim could arise, rather than dealing with it after it could occur. It’s different from transferring risk to an insurer (paying a premium to shift the financial burden), risk sharing (spreading potential losses among a group), or retaining all risk (accepting and bearing losses yourself). In practice, this could mean avoiding high‑risk activities or operations to prevent a claim from being possible. In health insurance terms, it reflects taking steps to minimize the chances of a loss by steering clear of risky situations rather than outsourcing the risk through coverage.