Recapture

What Does Recapture Mean?

Recapture is a provision in a contract that allows the seller to regain ownership of an asset or a portion of it from the buyer.

In the context of insurance, recapture refers to a ceding company reclaiming risks that were previously transferred to a reinsurer.

Insuranceopedia Explains Recapture

Mall space for vendors often includes a recapture clause. Typically, a percentage of the seller’s sales in the mall is designated for the mall owner. If the seller fails to meet this obligation due to insufficient sales, the contract may be terminated, or the lessee may voluntarily withdraw.

Recapture also occurs in the insurance industry when an insurer, after transferring risks to a reinsurer, reclaims those risks after a certain period.