Risk Acceptance

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Risk acceptance is a risk management strategy in which an organization chooses to accept the potential consequences of a risk without taking action to mitigate or transfer the risk. This strategy is typically used when the cost of mitigating or transferring the risk is greater than the potential impact of the risk itself.

Risk acceptance should be a deliberate and informed decision, made after a thorough risk assessment has been conducted. The decision to accept a risk should be based on a clear understanding of the potential consequences of the risk, the likelihood of the risk occurring, and the organization’s risk tolerance.

While risk acceptance can be a valid strategy for managing certain risks, it should not be used as a default strategy or to avoid addressing risks.

Risks that could have a significant impact on an organization’s ability to achieve its objectives should be carefully evaluated, and risk mitigation or transfer strategies should be considered before deciding to accept the risk.

Some common methods of risk acceptance include


An organization may choose to accept the potential financial consequences of a risk by purchasing insurance coverage.

Contingency planning

An organization may develop a contingency plan to manage the consequences of a risk if it occurs.

Risk sharing

An organization may share the risk with another party, such as a partner or supplier, who has a vested interest in managing the risk.

Business decision-making

In some cases, an organization may decide that the potential benefits of taking a business risk outweigh the potential negative consequences and may choose to accept the risk without taking additional action.

Overall, risk acceptance should be a conscious and informed decision, made with a clear understanding of the potential consequences and the organization’s risk tolerance. It is important to note that risk acceptance should not be used as a substitute for effective risk management and mitigation strategies.

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