Contractual Risk Transfer. To reduce your exposure to loss and protect your business it is critical to implement risk transfer strategies. Office building and janitorial service company janitorial service companies are hired by office building owners or managers to keep the premises clean and safe.
Contractual risk transfer the use of contractual obligations such as indemnity and exculpatory agreements waivers of recovery rights and insurance requirements to pass along to others what would otherwise be ones own risks of loss. Contractual risk transfer techniques 7192017 5 guiding principles for the contract process the party with the greater control of the risk is in the better position to avoid risk and should be responsible for the financial burden if a loss occurs the utility must ensure that its contractors are financially responsible if the. Controlling contractual risk transfer when entering into contractual relationship you.
For contractors this means requiring provisions to be included in all subcontractor contracts in order to transfer the risk appropriately.
Achieving contractual risk transfer happens when the language in a non insurance agreement excuses one party from financial or legal responsibility. Risk transfer is a risk management and control strategy that. Many states have laws that require specific legal language in order to make contractual risk transfer enforceable and some states have outlawed specific types of contractual risk transfer altogether. Transfer as much risk as you can off your own insurance.