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What is Force Majeure?

 , November 26, 2015 updated on July 24, 2017
Force majeure is the chance of a large scale negative event over which a business has no power such as a war, major crime, hurricane, flood, earthquake, tsunami or volcanic eruption. It is a common liability exemption in contracts such as insurance policies. In some cases, force majeure is also incorporated as an exemption to terms outlined in international treaties.
According to most accepted definitions, an event must be external, unpredictable and irresistible to qualify as force majeure.
Overview: Force Majeure
TypeRisk
DefinitionThe potential for a negative large scale event that's fully beyond your control to result in losses.
Risk TreatmentsAvoid
Reduce
Transfer
Accept
Related ConceptsWeather Risk
Financial Risk

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