Definition Risk Transfer Insurance

Transfer of risk a risk management technique whereby risk of loss is transferred to another party through a contract e g a hold harmless clause or to a professional risk bearer i e an insurance company.

Definition risk transfer insurance. It is primarily used to transfer risks of loss in exchange for payment of certain amount known as premium. The insurance is a form of risk management. Transfer of wagers can be executed through buying an insurance policy contractual agreements etc. Purchasing insurance is a common example of transferring risk from an individual or entity to an insurance company.

A risk management technique whereby one party transferor pays another transferee to assume a risk that the transferor desires to escape. Links for irmi online subscribers only. The insurer company is engaged in the business of selling the insurance willing to accept the risk the person desirous of purchasing the insurance willing to transfer the risks. Such risks may or may not necessarily take place in the future.

Risk transfer refers to a risk management technique in which risk is transferred to a third party. In other words risk transfer involves one party assuming the liabilities of another party. This is the underlying tenet of the. Risk transfer in its true essence is the transfer of the implications of risks from one party individual or an organization to another third party or an insurance company.

Insuranceopedia explains transfer of risk.