--- title: Risk Transference – Let Someone Else Handle the Heavy Lifting description: Depending on your organization’s resources and size, using risk transference to mitigate your risk may be a good option to consider. image: https://mha-it.com/hubfs/Imported_Blog_Media/photo8-1.jpg --- [Skip to content](https://mha-it.com/blog/risk-transference#main-content) [![MHA by BCMMetrics - navy](https://46330580.fs1.hubspotusercontent-na1.net/hub/46330580/hubfs/MHA%20by%20BCMMetrics%20-%20navy.png?width=245&height=54&name=MHA%20by%20BCMMetrics%20-%20navy.png "MHA by BCMMetrics - navy")](https://mha-it.com/) - [Our Consulting Services](https://mha-it.com/what-we-do) - [Business Continuity](https://mha-it.com/business-continuity) - [Crisis Management](https://mha-it.com/crisis-management) - [Disaster Recovery](https://mha-it.com/disaster-recovery-consulting-services) - [BCaaS](https://mha-it.com/bcaas) - [Program Augmentation](https://mha-it.com/program-augmentation) - [Training and Awareness](https://mha-it.com/training-awareness) - [Our BC Software](https://bcmmetrics.com/) - Resources - [Blog](https://mha-it.com/blog) - [News](https://mha-it.com/news) - [About Us](https://mha-it.com/who-we-are) - [Our Team](https://mha-it.com/our-team) - [Clients](https://mha-it.com/clients) - [In the Community](https://mha-it.com/in-the-community) [Contact Us](https://mha-it.com/contact) [![mhalogo](https://mha-it.com/hubfs/mhalogo.svg "mhalogo")](https://mha-it.com/) [Contact Us](https://mha-it.com/contact) [![mhalogo](https://mha-it.com/hubfs/mhalogo.svg "mhalogo")](https://mha-it.com/) - [Our Consulting Services](https://mha-it.com/what-we-do) - [Business Continuity](https://mha-it.com/business-continuity) - [Crisis Management](https://mha-it.com/crisis-management) - [Disaster Recovery](https://mha-it.com/disaster-recovery-consulting-services) - [BCaaS](https://mha-it.com/bcaas) - [Program Augmentation](https://mha-it.com/program-augmentation) - [Training and Awareness](https://mha-it.com/training-awareness) - [Our BC Software](https://bcmmetrics.com/) - Resources - [Blog](https://mha-it.com/blog) - [News](https://mha-it.com/news) - [About Us](https://mha-it.com/who-we-are) - [Our Team](https://mha-it.com/our-team) - [Clients](https://mha-it.com/clients) - [In the Community](https://mha-it.com/in-the-community) [Contact Us](https://mha-it.com/contact) [![mhalogo](https://mha-it.com/hubfs/mhalogo.svg "mhalogo")](https://mha-it.com/) [Contact Us](https://mha-it.com/contact) - [Our Consulting Services](https://mha-it.com/what-we-do) - [Business Continuity](https://mha-it.com/business-continuity) - [Crisis Management](https://mha-it.com/crisis-management) - [Disaster Recovery](https://mha-it.com/disaster-recovery-consulting-services) - [BCaaS](https://mha-it.com/bcaas) - [Program Augmentation](https://mha-it.com/program-augmentation) - [Training and Awareness](https://mha-it.com/training-awareness) - [Our BC Software](https://bcmmetrics.com/) - Resources - [Blog](https://mha-it.com/blog) - [News](https://mha-it.com/news) - [About Us](https://mha-it.com/who-we-are) - [Our Team](https://mha-it.com/our-team) - [Clients](https://mha-it.com/clients) - [In the Community](https://mha-it.com/in-the-community) [Contact Us](https://mha-it.com/contact) Risk Management # Risk Transference – Let Someone Else Handle the Heavy Lifting Richard Long Updated on: February 25, 2025 #### Relevant Contents #### Need Tailored Business Continuity Insights? Contact Us Now for Personalized Guidance! [Schedule a Free Consultation](https://mha-it.com/contact) ##### *Depending on your organization’s resources and size, using risk transference to mitigate your risk may be a good option.  * In a recent blog we discussed the [acceptance of risk](https://mha-it.com/blog/risk-acceptance-strategy). When accepting risk is not appropriate, the strategies for risk mitigation include: developing and implementing strategies in house; using third parties to develop and implement the solutions, with in-house maintenance; or turning the entire solution over to a third party. For most organizations, some use of risk transference is appropriate. ## What is Risk Transference and When Should You Use It? **Risk Transference**: Risk transference is handing risk off to a willing third party. ![risk transference](https://mha-it.com/hs-fs/hubfs/Imported_Blog_Media/risk-transference-1000-350-px-1.png?width=1000&height=350&name=risk-transference-1000-350-px-1.png)   **The most frequently used and easiest method of risk transference is insurance. Insurance is the financial transfer of risk. When using insurance for risk mitigation, it is important to remember:** 1. Insurance does not address brand/image impact. While the insurance may pay for financial losses, the loss of customer or public confidence may severely impact the organization. Think about organizations that lose customer data or restaurants where customers get sick. 2. Insurance has conditions that must be met before the payout occurs. Ensure that you understand any conditions, notifications, documentation, etc. 3. All situations may not be covered, depending on the cause. There may need to be additional riders on the policy or other mitigation solutions. ## Third Parties That Manage Risk Physical security is another risk transference function that can be performed by third party companies. Economies of scale often make external security a better choice than using an internal solution. Third parties are often used for cost containment or to allow for more focus on core competencies. These same justifications can be used in the risk transference mitigation strategy. Rather than implementing risk mitigation solutions for business functions or processes, organizations may consider using third parties to accept the risk. For example, certain business functions with operational risk – such as customer service, call center, or payroll services – can easily be performed by third parties. Technical functions such as network and data security monitoring, first level technical support, and server administration and monitoring are also candidates for third party use. As these functions become more impactful to overall risk, and the integration of technology more complex, the use of experts who can focus on those specific items often makes the most technical and financial sense. The use of Software as a Service (SaaS) is analogous to using third party providers. The technical risk and recovery risk is moved to the SaaS provider along with the business risk it may mitigate. For all third party vendor engagements, understanding the services, recovery commitment, service level agreements, change procedures, and risk mitigation strategies is critical to ensuring that your risk is mitigated appropriately. Consider your current service providers and how they might fit in to your risk mitigation strategy. They may provide services that your organization can or should move to allow for more focus on competencies that are strategic and grow the business. --- ![](https://mha-it.com/hubfs/Richard%20Long-MHA-Consulting.png) #### Richard Long Richard Long is one of MHA’s practice team leaders for Technology and Disaster Recovery related engagements. He has been responsible for the successful execution of MHA business continuity and disaster recovery engagements in industries such as Energy & Utilities, Government Services, Healthcare, Insurance, Risk Management, Travel & Entertainment, Consumer Products, and Education. Prior to joining MHA, Richard held Senior IT Director positions at PetSmart (NASDAQ: PETM) and Avnet, Inc. (NYSE: AVT) and has been a senior leader across all disciplines of IT. He has successfully led international and domestic disaster recovery, technology assessment, crisis management and risk mitigation engagements. ## Start building a stronger future ##### Navigate uncertainty with an expert - schedule your free consultation with our CEO, Michael Herrera. [Schedule your consultation](https://mha-it.com/contact) ## Other resources you might enjoy ![strategies to mitigate risk](https://mha-it.com/hs-fs/hubfs/Imported_Blog_Media/strategies-to-mitigate-risk-1.jpg?height=245&name=strategies-to-mitigate-risk-1.jpg) #### [Don’t Just Hope: Choosing Strategies to Mitigate Risk](https://mha-it.com/blog/dont-just-hope-choosing-strategies-to-mitigate-risk) [Read More](https://mha-it.com/blog/dont-just-hope-choosing-strategies-to-mitigate-risk) ![Critical supplier vetting meeting reviewing supplier dependencies, continuity evidence, recovery capabilities, risk levels, and alternate sources.](https://46330580.fs1.hubspotusercontent-na1.net/hub/46330580/hubfs/Managing%20Third-Party%20Risk.png?height=245&name=Managing%20Third-Party%20Risk.png) #### [Third-Party Risk Management: How to Vet Critical Suppliers](https://mha-it.com/blog/third-party-risk-critical-suppliers) [Read More](https://mha-it.com/blog/third-party-risk-critical-suppliers) ![Dancing in the Dark: The Hidden Costs of Shadow IT](https://46330580.fs1.hubspotusercontent-na1.net/hub/46330580/hubfs/Blog%20images/November-December%202024/IT%20Crisis%20Management%20Best%20Practices.webp?height=245&name=IT%20Crisis%20Management%20Best%20Practices.webp) #### [Dancing in the Dark: The Hidden Costs of Shadow IT](https://mha-it.com/blog/hidden-costs-shadow-it) [Read More](https://mha-it.com/blog/hidden-costs-shadow-it) ## Ready to start focusing on higher-level challenges? [![MHA by BCMMetrics - White](https://46330580.fs1.hubspotusercontent-na1.net/hub/46330580/hubfs/MHA%20by%20BCMMetrics%20-%20White.png?width=308&height=68&name=MHA%20by%20BCMMetrics%20-%20White.png "MHA by BCMMetrics - White")](https://mha-it.com/) Business continuity consulting for today’s leading companies. #### Company - [Who We Are](https://mha-it.com/who-we-are) - [Team](https://mha-it.com/our-team) - [Clients](https://mha-it.com/clients) - [News](https://mha-it.com/news) - [Blog](https://mha-it.com/blog) - [Contact](https://mha-it.com/contact) #### Services - [Business Continuity](https://mha-it.com/business-continuity) - [Disaster Recovery](https://mha-it.com/disaster-recovery-consulting-services) - [Crisis Management](https://mha-it.com/crisis-management) - [BCaaS](https://mha-it.com/bcaas) - [Training & Awareness](https://mha-it.com/training-awareness) - [Program Augmentation](https://mha-it.com/program-augmentation) © 2026 MHA Consulting. All rights reserved.  [Privacy Policy](https://mha-it.com/privacy-policy) ```json { "@context" : "", "@type" : "BreadcrumbList", "itemListElement" : [ { "@type" : "ListItem", "item" : "https://mha-it.com", "name" : "Home", "position" : 1 }, { "@type" : "ListItem", "item" : "https://mha-it.com/blog", "name" : "Blog", "position" : 2 }, { "@type" : "ListItem", "name" : "Risk Transference – Let Someone Else Handle the Heavy Lifting", "position" : 3 } ] } ``` ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Richard Long", "url" : "https://mha-it.com/blog/author/richard-long" }, "dateModified" : "2025-02-25T11:21:23.090Z", "datePublished" : "2016-08-17T09:00:13.000Z", "headline" : "Risk Transference – Let Someone Else Handle the Heavy Lifting", "image" : [ "https://mha-it.com/hubfs/Imported_Blog_Media/photo8-1.jpg" ], "mainEntityOfPage" : { "@id" : "https://mha-it.com/blog/risk-transference", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://mha-it.com/hubfs/Frame%2016353%20(1).svg" } } } ```