Engaging a third party to assume the exposure through insurance or contractual terms is the correct choice because it explicitly describes transferring the exposure to an external party who accepts financial or contractual responsibility for potential losses.

Transfer is a risk treatment that shifts responsibility for potential loss to another entity, often through insurance policies, indemnity clauses, or service contracts. By placing the obligation on an insurer or contracting partner the original organization reduces its direct exposure while the risk continues to exist in another form.

Implementing safeguards to reduce the probability or severity of the exposure is incorrect because that describes mitigation or controls that reduce likelihood or impact rather than shifting responsibility to a third party.

Acknowledging the exposure and maintaining a contingency plan is incorrect because that describes acceptance or retention, which means keeping the risk and preparing to respond rather than transferring it.

Eliminating the activity that produces the exposure so that the risk no longer exists is incorrect because that describes avoidance, which removes the activity to eliminate the risk rather than assigning it to an external party.

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