Risk Transfer
/ˈrɪsk trænsˌfɜr/
Definitions
- (n.) The legal mechanism or process whereby one party transfers the exposure to risk to another party, often through contracts such as insurance or indemnity agreements.
The company used risk transfer provisions to shift liability to its insurer.
- (n.) The allocation of potential loss or liability from one contractual party to another as a risk management technique.
Risk transfer is commonly employed in construction contracts to allocate responsibility for damage.
Forms
- risk transfer
- risk transfers
Related terms
See also
Commentary
Risk transfer is often embodied in contractual clauses and insurance policies; drafters should clearly specify scope and conditions to avoid disputes.
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.