This is an example of transference. When the risk is transferred to a third party, usually for a fee, it creates a contractual-relationship for the third party to manage the risk on behalf of the performing organization. Risk response planning is a method of developing options to decrease the amount of threats and make the most of opportunities. The risk response should be aligned with the consequence of the risk and cost-effectiveness. This planning documents the processes for managing risk events. It addresses the owners and their responsibilities, risk identification, results from qualification and quantification processes, budgets and times for responses, and contingency plans. The various risk response planning techniques are as follows:
Risk acceptance: It indicates that the project team has decided not to change the project management plan to deal with a risk, or is unable to identify any other suitable response strategy. Risk avoidance: It is a technique for a threat, which creates changes to the project management plan that are meant to either eliminate the risk or to protect the project objectives from this impact. Risk mitigation: It is a list of specific actions being taken to deal with specific risks associated with the threats and seeks to reduce the probability of occurrence or impact of risk below an acceptable threshold. Risk transference: It is used to shift the impact of a threat to a third party, together with the ownership of the response.