Abstract: Considering the risk transfer problem between the supply chain agents, we introduce the deductible insurance contract based on the wholesale price contract, and clearly define the loss and its probability distribution.Then we discuss the effects of optimal deductible on the decision makers'objective function in risk averse situation and give the condition to get the optimal value.We also make a comparative analysis on the optimal order quantity in the risk neutral situation.The results show that under certain condidons the supply chain can be coordinated Finally, numerical analysis is offered to study the effects of parameters on the premium, and the finds can be used as decision references while the decision makers confirm the insure contract.

Key words: insurance contract, risk, utility function, deductible