Risk Retention
/ˈrɪsk rɪˈtɛnʃən/
Definitions
- (n.) The practice whereby a party, such as a business or insurer, retains the financial risk of loss instead of transferring it to another party, often by self-insurance or deductibles.
The company engaged in risk retention to manage its exposure to minor claims internally.
- (n.) A liability management strategy that involves consciously accepting and budgeting for potential losses without transferring them through insurance or other means.
Risk retention allows organizations to control costs by avoiding premiums but requires adequate reserves.
Forms
- risk retention
Related terms
See also
Commentary
Risk retention is a key concept in insurance law and corporate risk management, emphasizing intentional retention of risk rather than incidental or unplanned exposure; drafting should clarify if risk retention is voluntary and strategic.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.