A-Z Popular Blog Risk Search »
Related Guides
Risk Management

Risk Treatment

Risk Analysis

Risk Identification

Risk Mitigation

Business Risks

Risk Control

Calculated Risk

Risk Impact

5 Types of Risk Treatment

 , updated on
A risk treatment is an action that is taken to manage a risk. Risk management processes all include steps to identify, assesses and then treat risks. In general, there are five types of risk treatment:

1. Avoidance

You can choose not to take on the risk by avoiding the actions that cause the risk. For example, if you feel that swimming is too dangerous you can avoid the risk by not swimming.

2. Reduction

You can take mitigation actions that reduce the risk. For example, wearing a life jacket when you swim.

3. Transfer

You can transfer all or part of the risk to a third party. The two main types of transfer are insurance and outsourcing. For example, a company may choose to transfer a collection of project risks by outsourcing the project.

4. Acceptance

Risk acceptance, also known as risk retention, is choosing to face a risk. In general, it is impossible to profit in business or enjoy an active life without choosing to take on risk. For example, an investor may accept the risk that a company will go bankrupt when they purchase its bonds.

5. Sharing

Risk sharing is the distribution of risk to multiple organizations or individuals. This is done for a variety of reasons including insurance products and self-insurance strategies.

Residual Risk

Risk treatments don't necessarily reduce risks to zero. Remaining risk after treatment is known as residual risk.

Secondary Risk

It's common for your efforts to reduce risk to have risks of their own. These are known as secondary risks. For example, if you outsource a project you will assume a number of secondary risks such as the risk that the outsourcing company will fail to deliver.


Risk treatment is any action that is taken to manage a risk. This includes risk acceptance whereby nothing is done to reduce the risk after a process of due diligence and sign off.
Next: Risk Mitigation
More about risk treatment:
Risk Measurement
More ...
If you enjoyed this page, please consider bookmarking Simplicable.

Risk Control

A list of common risk controls.

Risk Mitigation

A list of techniques for reducing risk.

Risk Management

An overview of the risk management process.

Cascading Failure vs Resilience

An overview of cascading failure and resilience.

Business As Usual

An overview of business as usual.

Risk Mitigation vs Risk Reduction

The difference between risk mitigation and risk reduction.

Risk Value

A definition of risk value with example calculation.

Risk Impact

The common types of risk impact.

Risk Communication

A definition of risk communication with examples.

Risk Management Process

Overview of the steps in a risk management process.

Business Risks

A list of common business risks.

Risk Management Effectiveness

A metric for measuring risk management.

Positive Risk

The potential that you'll achieve too much of a good thing.

Dread Risk

Any risk that people have a strong aversion too.

Risk Taking

The definition of risk taking with examples.

Risk Examples

A list of risk examples by type.

Risk Probability vs Risk Impact

The two main factors in modeling a risk.

Calculated Risk

A definition of calculated risk with an example.

Relative Risk

How to calculate relative risk with examples.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map