Risk Class Law and Legal Definition

In insurance underwriting, risk class is a consortium of insureds with an equal degree of risk. Generally, the underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.

The risk class indicates the anticipated impact of a risk on the venture. The magnitude of risk is depends on the chance of occurrence and the risk effect. If the chance of occurrence and the risk effect increase, the risk class also increases.