In risk management, what does 'mitigation' refer to?

Mitigation in risk management refers to the strategies and measures taken to reduce the frequency or severity of potential losses. The focus is on identifying risks and implementing actions that can lessen the impact or likelihood of negative outcomes occurring. This can include measures such as enhancing safety protocols, implementing comprehensive training programs, or investing in better security systems. By addressing risks proactively, organizations can minimize the consequences that might arise from those risks, allowing for improved safety and reduced financial impact.

Other options describe different aspects of risk management. Eliminating potential losses completely is often unrealistic in many situations, as there will always be some level of risk involved. Transferring risk to another party typically refers to strategies like insurance, which is focused on sharing the financial burden rather than reducing the risk itself. Retaining risk without any coverage means accepting the potential for loss without any measures in place to reduce it or protect against it, which contrasts with the core principle of mitigation.