If a risk is determined to be unacceptable and cannot be mitigated, what should the organization do?

When a risk is deemed unacceptable and cannot be mitigated, transferring the risk through insurance or outsourcing is an effective strategy. This approach allows the organization to shift the potential burden of the risk to another party that is better equipped to manage it. By purchasing insurance, the organization can protect itself financially against losses that may arise from the risk. Similarly, outsourcing certain functions can place the responsibility for those risks into the hands of specialized service providers who may have the expertise and resources to handle them more effectively.

This strategy is important because it acknowledges the existence of the risk while actively seeking to manage its potential impact. Organizations often face risks that are beyond their control, and transferring them can be a sensible approach in certain cases, provided it aligns with the organization's overall risk management strategy. This ensures that the organization can continue its operations with a more manageable level of risk exposure, allowing it to focus on its core objectives without exposing itself to undue threats.