risk

In insurance law, the danger or hazard of a loss of the property insured; the casualty contemplated in a contract of insurance; the degree of hazard; a specified contingency or peril; and, colloquially, the specific house, factory, ship, etc., covered by the policy. Hazard, danger, peril, exposure to loss, injury, disadvantage or destruction, and comprises all elements of danger. Knox Jewelry Co., Inc. v. Cincinnati Ins. Co., 130 Ga. App. 519, 203 S.E.2d 739, 740.

In general, the element of uncertainty in an undertaking; the possibility that actual future returns will deviate from expected returns. Risk may be moral, physical or economic. Risk of loss in commercial sales contracts as between buyer and seller is governed by U.C.C. No. 2-509 (e.g., financial responsibility for damage or destruction of property when transferred between seller and buyer).

See also assumption of risk

- ex ship

- incurred risk.

- obvious risk

- ordinary risk.

@ risk arbitrage

A strategy employed in takeover situations in which shares of a corporation that is about to be taken over are bought, while shares of the acquiring corporation that are to be exchanged are sold short or on a when-issued basis

@ risk capital

Money or property invested in a business venture, generally in exchange for common stock in a business, or capital in a partnership, as distinguished from loans or bonded indebtedness.

See also seed money

- venture capital

@ risk capital test

Under this test, for determination of whether an investment is a security in the form of an investment contract, requires consideration of whether funds are being raised for business venture or enterprise, whether transaction is offered indiscriminately to the public at large, whether investors are substantially powerless to affect success of enterprise, and whether investors' money is substantially at risk because it is inadequately secured. Moreland v. Department of Corporations, 5 Dist., 194 C.A.3d 506, 239 Cal.Rptr. 558, 566

@ risk incident to employment

Within worker's compensation acts, one growing out of or connected with what worker must do in fulfilling his or her contract of service, and may be either ordinary risk, directly connected with employment, or extraordinary risk indirectly connected with employment because of its special nature

@ risk premium

Extra compensation paid to an employee or extra interest paid to a lender, over amounts usually considered normal, in return for their undertaking to engage in activities more risky than normal

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