MANAGEMENT

Detailed explanation-1: -Risk transfer is a risk management and control strategy that involves the contractual shifting of a pure risk from one party to another. One example is the purchase of an insurance policy, by which a specified risk of loss is passed from the policyholder to the insurer.

Detailed explanation-2: -While the transfer of risk involves transferring risk to another individual or entity for a price, risk sharing involves sharing or dividing a common risk among two or more persons.

Detailed explanation-3: -Risk transfer can be of mainly three types, namely, Insurance, Derivatives, and Outsourcing.

Detailed explanation-4: -Risk sharing is a risk management strategy that companies or individuals use to transfer risk to a third party. Individuals and companies take risks when involved in business and use risk sharing to cover the potential loss from an uncertain event.

Detailed explanation-5: -The most common way to transfer risk is through an insurance policy, where the insurance carrier assumes the defined risks for the policyholder in exchange for a fee, or insurance premium, and will cover the costs for worker injuries and property damage.