What strategy is characterized by eliminating exposure to risks altogether?

The strategy characterized by eliminating exposure to risks altogether is known as avoidance. This approach focuses on identifying potential risks and taking measures to completely prevent them from occurring. For instance, a business might choose not to engage in certain activities or operations that carry significant risk, effectively removing the potential for loss or damage associated with those activities.

Choosing avoidance is often seen as the most effective strategy for managing risk because it does not merely lessen the impact of a risk, but instead eliminates it. Other strategies, such as retention, sharing, or transfer, deal with managing risks that cannot be fully avoided; they focus on retaining the risk, spreading it among multiple parties, or transferring it to another entity through mechanisms like insurance. However, avoidance aims to prevent the risks from arising in the first place, making it a proactive and comprehensive strategy in risk management.