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business risk

Business risk is a risk of loss so closely tied to an insured's way of doing business that it is considered not to be an appropriate subject of insurance coverage; such risks are typically addressed as overhead (i.e., the cost of the loss is included in the price of the business's products or services) or as a subject for loss control.

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Additional Information

The cost of replacing a defective product or redoing defective work is a classic "business risk" and therefore is excluded from most liability policies.