Risk financing

{
  "id": "MLC-T-INS-002969",
  "term": "Risk financing",
  "field": "Insurance and risk management",
  "definition": "The methods an organization uses to source funds to pay for its financial losses. These techniques are broadly divided into risk retention, where the firm pays for its own losses through self-insurance or cash reserves, and risk transfer, where the financial burden is shifted to another party via insurance or contractual agreements. The selection of risk financing techniques is a core component of a risk management program, distinct from risk control measures that aim to prevent losses.",
  "subject": "Workers Compensation",
  "url": "https://mlchart.com/terminology/insurance/risk-financing/"
}