Which risk response strategy is considered most appropriate for risks identified with low expected frequency and low expected severity?

When dealing with risks characterized by low expected frequency and low expected severity, the response strategy of tolerating these risks is typically deemed most appropriate. This is because the potential impact of these risks is minimal, and the cost or effort required to actively mitigate or eliminate them may outweigh the benefits.

In practice, tolerating a risk means accepting it as part of the business environment, treating it as an inherent part of operations that does not warrant special attention or resources. This approach allows organizations to maintain focus on more significant risks that could have a higher impact on their objectives. By monitoring the situation instead of actively engaging in intensive management, organizations can allocate their resources more efficiently.

Active risk transfer or termination would not make sense in this context, as these strategies are better suited for risks that pose a higher threat. Ignoring the risks entirely may imply a lack of awareness or oversight, which can be problematic even for low-frequency and low-severity risks. Therefore, tolerating these risks allows for a balanced, pragmatic approach to risk management in the context of overall strategic priorities.