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Explain the relationship between types of risk action and where each might be utilized.
Risk actions are of mainly two types: avoidance actions and mitigation actions:
Avoidance actions are designed to decrease the likelihood of a risk happening, preferably reducing its probability to zero by removing this.
Mitigation actions are designed to decrease the impact of the risk when this arises, sometimes by identifying contingency plans which can be activated. A particular form of mitigation is risk transfer whereby the impact is created to fall on someone else, when is the case along with an insurance policy.
In fact, both types of risk action are generally needed as, even though avoidance actions are accessible (that sometimes they are not), they may fail and a fallback response is needed. This is also worth considering which, when the costs of avoidance or mitigation are higher than such of the perceived risk impact, a absolutely rational response may be to accept the risk.
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