Risk transfer moves financial or operational responsibility for specific risks from one entity to another, typically in exchange for payment or contractual terms. Insurance is the most common transfer mechanism, covering property damage, liability, or business interruption risks beyond an organization's tolerance. Derivatives like futures and options transfer market price risks, while indemnification clauses in contracts shift liability between business partners. However, reputational risk often cannot be transferred even when financial exposure is covered. Organizations must balance transfer costs against retained risk and recognize that some accountability always remains.