What Does Recapture Mean?

Recapture is a provision in a contract that entitles the seller to gain back an asset or a portion of it from a buyer.

In terms of insurance, it means that a ceding company retrieves the risks it once turned over to a reinsurer.


Insuranceopedia Explains Recapture

Mall space for vendors often has a recapture clause. A percentage of the sales of a seller in the mall is usually meant for the mall owner. Failure to so because of lack of sales means a termination of the contract or the voluntary withdrawal of the lessee.

Recapture also occurs in the insurance industry when an insurer that transferred risks to a reinsurer takes them back after a period of time.


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