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Transfer of Risk - Definition & Meaning | Logistics Glossary

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GlossaryEN1 min readUpdated: Jun 22, 2026

Transfer of Risk

Transfer of risk defines the precise moment at which the buyer assumes liability for loss, damage, or deterioration of goods – regardless of who holds legal title.

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Transfer of risk defines the precise moment at which the buyer assumes liability for loss, damage, or deterioration of goods – regardless of who holds legal title.

In international trade, this point is determined by the Incoterms rule agreed in the sales contract: under FOB, risk passes once the goods are on board the vessel; under CIP, the seller bears risk…

The distinction between transfer of risk and transfer of ownership is critical for insurance coverage and damage claims: any loss occurring after the risk has passed falls within the buyer's sphere…

Last updated: 22 June 2026Published: 19 June 2025

Source: https://iccwbo.org/business-solutions/incoterms-rules/

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Transfer of Risk

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Definition & Explanation

Transfer of risk defines the precise moment at which the buyer assumes liability for loss, damage, or deterioration of goods – regardless of who holds legal title. In international trade, this point is determined by the Incoterms rule agreed in the sales contract: under FOB, risk passes once the goods are on board the vessel; under CIP, the seller bears risk until handover to the first carrier. The distinction between transfer of risk and transfer of ownership is critical for insurance coverage and damage claims: any loss occurring after the risk has passed falls within the buyer's sphere of responsibility. Freight forwarders and legal counsel therefore scrutinise the agreed delivery terms carefully when reviewing commercial contracts.

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Recommended format: Source: Freight Academy – Transfer of Risk (https://www.freight-academy.com/en/glossary/transfer-of-risk), accessed 2026-09-12
APA style: Freight Academy Editorial Team. (2025). Transfer of Risk. Freight Academy. https://www.freight-academy.com/en/glossary/transfer-of-risk
BibTeX: @misc{transferofrisk2025, title = {Transfer of Risk}, author = {{Freight Academy Editorial Team}}, year = {2025}, url = {https://www.freight-academy.com/en/glossary/transfer-of-risk}, note = {Freight Academy, accessed 2026-09-12} }

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