The process of shifting financial responsibility for potential losses from your business to an insurance company by purchasing a policy. When you buy insurance, you pay a premium to transfer specific risks - meaning if those losses occur, the insurer pays instead of you. The transfer includes covered losses up to your policy limits, minus any deductible you're responsible for. This transfer represents a critical component of enterprise risk management, shifting defined financial exposures from the organisation's balance sheet to an insurer's. Effective risk transfer means choosing appropriate coverage limits and understanding what is and isn't covered by your policy.

The process of shifting financial responsibility for potential losses from your business to an insurance company by purchasing a policy. When you buy insurance, you pay a premium to transfer specific risks - meaning if those losses occur, the insurer pays instead of you. The transfer includes covered losses up to your policy limits, minus any deductible you're responsible for. This transfer represents a critical component of enterprise risk management, shifting defined financial exposures from the organisation's balance sheet to an insurer's. Effective risk transfer means choosing appropriate coverage limits and understanding what is and isn't covered by your policy.