The risk response plan should be developed before the risk event occurs. If the event occurs, then execute the plan.
The four risk response strategies in project management are:
Avoid
- Eliminating the possibility of a risk or avoiding it altogether
- Avoiding the risk usually eliminates the risk, if possible
Transfer
- Risk transfer shifts the risk to another party such as an insurance company or subcontractor
- Risk transfer may be used when the cost of addressing the risk is too high or when another party is better able to manage the risk
Mitigate
- Mitigation entails actions to prevent risks or minimize their impact
- Risk mitigation is a common method for treating risk
Accept
- Deciding to accept the risk instead of eliminating, avoiding, or mitigating it
- This strategy may be used when the cost of eliminating the risk is higher than the original cost of the risk
