Purchasing an accident insurance policy is an example of what type of risk response?

Purchasing an accident insurance policy is an example of transferring risk. This approach involves shifting the financial burden of potential losses to another party, in this case, the insurance company. By acquiring insurance, you effectively transfer the risk of significant financial impact from an accident to the insurer, which agrees to cover the costs associated with such incidents according to the terms of the policy.

This method is commonly used in project management and other fields to manage risks that cannot be entirely eliminated or avoided. Insurance mitigates potential liabilities, allowing individuals or organizations to focus on their primary activities without the constant worry of substantial financial losses due to unforeseen events. It is a proactive approach to managing risk that provides a safety net in the event of loss or damage.