Outsource Risk

The risk of loss arising from the inability of an organization to operate its production, manufacturing or other business activities as normally planned or budgeted due the failure of a key outsource party (or parties) to perform their contractual obligations.

This can be short, medium or long term disruptions and the result of operational, business or financial issues. Lack of resources, lack of sufficient managerial and/or technical and financial distress at an outsource partner are common reasons for this risk arising.