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Warning
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Simple English definitions for legal terms
shifting risk
Read a random definition: consultation
A quick definition of shifting risk:
Shifting risk means changing who is responsible for something bad that might happen. For example, if you buy insurance for your car, you are shifting the risk of an accident from yourself to the insurance company. This means that if you get into an accident, the insurance company will pay for the damage instead of you. Shifting risk is a way to protect yourself from bad things that might happen.
A more thorough explanation:
Definition: Shifting risk refers to the transfer of potential loss or harm from one party to another through insurance or other means.
For example, a business may purchase insurance to shift the risk of property damage or liability to the insurance company. In this case, the business pays a premium to the insurance company in exchange for the company assuming the risk of potential losses.
Another example of shifting risk is when a homeowner hires a contractor to perform renovations on their property. The homeowner may require the contractor to carry liability insurance to shift the risk of any damages or injuries that may occur during the renovation process from the homeowner to the contractor.
Shifting risk is a common practice in many industries and can help protect individuals and businesses from potential financial losses.