The selling of insurance in multiple areas to multiple policyholders to minimize the danger that all policyholders will have losses at the same time. Companies are more likely to insure perils that offer a good spread of risk. Flood insurance is an example of a poor spread of risk because the people most likely to buy it are the people close to rivers and other bodies of water that flood. (See Adverse selection )

"Spread Of Risk" In Context

"For this reason it is best to put your money into several funds, encompassing a number of asset classes and managers to give diversity and a spread of risk. This is what professional investment advisers normally do with their clients' money when they set ..."