A mining extraction company has recently developed a prototype for a new mining machine. The executives have decided to secure the mining machine out in the desert at one of its testing facilities. To secure the machine until the prototype enters production, they have decided to employ a risk transference strategy by purchasing theft insurance. Why is this strategy not as good as using a risk limitation strategy like hiring a security guard?

Insurance would not prevent theft like a security guard would.

Insurance is a more expensive option, and the policy would last too long.

Insurance would not cover any damages from theft but only the cost of replacement.

Obtaining insurance on a prototype machine is harder than hiring a guard.