Which risk management strategy involves using cybersecurity insurance?

The choice of transference as the correct answer reflects the fundamental concept of transferring the risk to another entity, typically through mechanisms like cybersecurity insurance. This strategy allows an organization to mitigate potential financial losses associated with a cybersecurity incident by purchasing insurance policies that cover various types of risks.

In the context of cybersecurity, transference does not eliminate the risk but instead shifts the financial burden to the insurance provider, meaning that if a breach or incident occurs, the organization can rely on the insurance to help cover costs associated with recovery, damage, or legal liabilities. This is particularly valuable as organizations assess their risk exposure and make decisions about how best to protect themselves financially.

The other strategies have different focuses: avoidance aims to eliminate risk altogether by not engaging in vulnerable activities, acceptance acknowledges the risk without taking additional action, and mitigation involves taking proactive steps to reduce the impact or likelihood of a risk. Each of these approaches serves its purpose in a comprehensive risk management strategy, but transference specifically involves the creative financial tool of insurance to manage risks by outsourcing potential losses to a third party.