A project manager is working on a project for a medical device manufacturing company. One of the project risks is potentially having to compensate patients who experience health issues because of the device. The project manager decides to address the risk by purchasing an insurance policy that would cover the cost of any incident.

Mitigation involves implementing measures to reduce the likelihood or impact of a risk. While the project manager may consider actions to minimize health issues associated with the device, purchasing insurance does not directly alter the risk itself; it simply transfers the financial liability. Thus, mitigation is not the correct classification for this strategy.

Accepting a risk means acknowledging its existence and deciding to proceed without taking any action to address it. In this scenario, the project manager is not willing to accept the potential financial consequences of health issues; instead, they proactively purchase insurance to manage that risk. Therefore, acceptance does not apply here.

Avoiding a risk entails taking action to eliminate the risk altogether, such as changing project plans or halting particular activities. The project manager’s decision to purchase insurance indicates a desire to manage the risk rather than eliminate it, making avoidance an unsuitable choice in this context.