Purchasing insurance is the primary way for an organization to share or transfer risk.
This is when a company undertake to indemnify a person in case there he or she suffer loss in return for paying a premium. it is some form of protection from any possible financial losses.
It is called a policy, in which an individual or organization receives financial protection and reimbursement of damages from the insurer or the insurance company.
In other words, is an arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
Hence, purchasing insurance is the primary way for an organization to share or transfer risk.
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