12.3 The four Ts of risk control

Question 1

What are the “four Ts” of risk control?

Answer 1

tolerate
treat
transfer
terminate

Question 2

Which standard provides the description of the 4Ts method?

Answer 2

ISO 31000: 2018

Question 3

To tolerate a risk exposure means… what?

Answer 3

… to take no formal action to control it.

Question 4

When is a risk exposure likely to be tolerated?

Answer 4

When it falls within the organisations appetite for risk, or where controls are prohibitively costly.

Question 5

What is a risk treatment?

Answer 5

An action taken to manipulate an organisation’s exposure to one or more risks.

Question 6

How could an organisation increase risk?

Answer 6

By increasing exposure or by reducing controls.

Question 7

What is risk transfer?

Answer 7

The passing of loss events to a third party.

Question 8

What is “indemnity”?

Answer 8

Financial security or protection from the financial effects of a loss event.

Question 9

What is “termination”?

Answer 9

Any action taken to stop an activity or move away from an area to avoid risk exposure. E.g. termianting an activity or vacating premises

Question 10

When is risk termination appropriate?

Answer 10

Where no level of risk exposure is considered tolerable, or where treatment/transfer is impossible.