assumption of risk

assumption of risk definition - business

assumption of risk

  1. Taking responsibility for a potential loss. For example, an individual who decides to forgo collision and comprehensive insurance on a vehicle assumes the risk of a loss from perils covered by these coverages.
  2. Contracting with another party to assume certain specified risks. For example, an individual may contract with an insurance company that assumes the risk there will be financial loss caused by a fire or strong winds.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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