insurance

Assumption of Risk

A legal doctrine where a person voluntarily accepts the known dangers and potential consequences of an activity, thereby reducing or eliminating another party's liability for injuries that result. In insurance, this can affect coverage decisions and claim settlements.

Example

“The skydiving company's insurance claim was denied because the injured participant had signed a waiver acknowledging assumption of risk for the inherently dangerous activity.”

Memory Tip

Remember assumption of risk as 'you knew the risk and took it anyway' - like choosing to pet a dog with a 'may bite' sign.

Why It Matters

Assumption of risk can significantly affect your ability to collect insurance benefits or sue for damages when you're injured. Understanding this concept helps you make informed decisions about activities and protects you from unknowingly waiving important legal rights.

Common Misconception

People often believe that signing a waiver or participating in a risky activity automatically eliminates all their rights to compensation. However, assumption of risk typically only applies to known, inherent risks, not to negligence or risks that weren't properly disclosed.

In Practice

Tom signs up for a rock climbing course and acknowledges the inherent risks of falling. During the climb, he falls 20 feet because his properly maintained rope failed due to a manufacturing defect. While Tom assumed the normal risks of climbing, he did not assume the risk of defective equipment. His insurance company and legal claim against the equipment manufacturer remain valid because the rope failure was not an inherent risk he voluntarily accepted, but rather negligence in manufacturing.

Etymology

From Latin "assumere" meaning to take up or adopt, combined with "risk" from Italian "riscare" meaning to dare, developed as a legal concept in 19th century tort law.

Common Misspellings

assumtion of riskassumption of rsikasumption of riskassumption of risc

Related Terms

Contributory Negligence Risk Management

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