A statement of coverage by the reinsurer under which payment is guaranteed to a party not in privity with the reinsurance contract. Same as Cut-Through Clause.

As the term implies, when one voluntarily assumes a risk, that person is believed to know the consequences of such an act. Therefore, he or she is responsible for any resulting injury or property damage. Often, in business, it is necessary to assume some risk, often contractually. Thus, there are various forms of insurance coverage that provide protection for assumed risk. (See Contractual Liability).

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One of the common law defenses available to an individual. For instance, one person riding with another in an automobile has generally “assumed the risk” and therefore, has no action against the driver of the vehicle should an accident occur. This is common law concept and has been modified by recent case laws and by Motor Vehicles Act.

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Coverage or acceptance of proposed risk perils by an Insurer.

A concept in common law often used as a defense. Assumption of risk states that by certain actions, a person assumes certain risks. For example, by riding on the back of someone else’s motorcycle, an individual has assumed the risk of a crash and should not be able to sue the driver should a crash occur.

Defense against a negligence claim that bars recovery for damages if a person understands and recognizes the danger inherent in a particular activity or occupation.

A form of reinsurance under which policy administration and the contractual relationship with the insured, as well as all liabilities, pass to the reinsurer the novation of liability is evidenced by an assumption certificate issued to the insured who, in some jurisdictions, has the right to refuse the change in insurers. See Indemnity reinsurance and Coinsurance.

A type of reinsurance. The company reinsuring the insured party assumes total responsibility for the policy from the original insurance company. This is done by transferring the policy from the insurer to the re-insurer.