An organization should analyze and acquire risk-sharing instruments, including insurance, reserves, captives, and joint ventures for appropriately addressing the potential impact of risks.
Principles
> Can never transfer 100% of risk -- must be shared
> Retentions and limits
> Understand terms of coverage and maintain compliance with terms
Business Objectives
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To ensure the organization is appropriately insured
Considerations
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Balancing of costs and benefits should be considered in transferring risk
Critical Success Factors
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Analysis to choose the most appropriate risk-sharing instruments