How does assigning risks help businesses?

Assigning risks is a strategic practice that helps businesses manage their exposure to potential losses. By identifying and allocating specific risks, companies can tailor their insurance coverage and risk management strategies to better protect themselves.

In the case of high-risk companies, assigning risks specifically allows businesses to ensure that they have the necessary coverage in place. High-risk companies may face greater likelihoods of claims due to the nature of their operations or sector. By recognizing and addressing these risks, organizations can work with insurers to secure coverage that is appropriate for their risk profile, facilitating not just compliance but also operational continuity. This targeted approach helps businesses mitigate financial impacts from potential claims, ensuring that they have adequate resources to handle incidents when they arise.

The other options either suggest unrealistic scenarios or misunderstandings about the risk assignment process in the context of business risk management.