Which of the following is one of the 4 T's of risk management?

In the context of risk management, one of the key strategies is known as "Transfer." This method involves shifting the responsibility for the risk to another party, often through mechanisms such as insurance contracts or outsourcing. By transferring the risk, an organization can manage its exposure to potential negative outcomes while still pursuing its objectives. This is particularly useful in situations where the potential impacts of a risk are significant, and the organization may not have the capacity or resources to absorb those impacts.

The concept of transferring risk underscores the importance of risk allocation in contracts and agreements, as it ensures that the burdens associated with specific risks are handled by the party best suited to manage them. This strategy effectively helps organizations focus on their core competencies while mitigating the potential adverse effects associated with various risks.

In general risk management practices, the other strategies—although relevant—do not define one of the four fundamental approaches as "Transfer" does. Understanding this notion is crucial for individuals involved in contract administration and risk assessment within organizations.