Which of the following is not an example of risk retention?

Risk retention refers to the strategy of managing risk by accepting it rather than transferring it to an insurance provider or other entity. When a person or organization retains risk, they acknowledge the potential for loss or liability but decide to bear the financial consequences themselves.

The correct choice illustrates a scenario that does not align with the concept of risk retention. In this case, choosing not to engage in a business deal after determining it is too risky indicates a decision to avoid the risk altogether. This is a proactive risk management strategy aimed at eliminating potential losses rather than retaining the risk.

On the other hand, the other options presented are examples of risk retention. Being aware of a risk and taking no action means you are accepting the possibility of that risk occurring without any preventive measures, which is a form of risk retention. Self-insuring a risk explicitly expresses an intention to retain that risk, as you are choosing to fund any potential losses from your own resources. Similarly, deciding to proceed with a business deal despite recognizing its risks is a conscious act of retaining those risks, indicating that you are prepared to handle any potential consequences.

Understanding these concepts is vital in the context of accident and health insurance, as they highlight how individuals and businesses assess and manage risk in their activities.