As part of its business operations, a company must store customers' personal information. The company understands that a data breach is a significant risk. If a breach occurred, the company could not afford the financial loss. Therefore, it has decided to purchase cybersecurity insurance to cover potential damages. Which risk management strategy is the company using?
Risk transference is a strategy that involves shifting the financial consequences of a risk to a third party. Purchasing insurance is the most common example of risk transference, as it moves the potential financial loss from an incident to the insurance provider.
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What is risk transference in cybersecurity?
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