Health & Safety
The chance of a disease or injury. This can be a business risk such as the risk that a poorly designed product will injure people. It can also be a personal risk such as the chance that you will get a disease.Fire
The probability of a fire that causes injury, loss of life and damage to property.Weather
The probability of unusually bad weather. This can cause losses for farmers and businesses.Disasters
The probability of a disaster such as an earthquake or hurricane.Crime
The probability that you will be a victim of crime such as a theft.Accidents
The probability of an accident such as a car accident.Political
The risk of political instability that impacts the normal functions of a society. For example, a corrupt government that is unable to sustain basic services such as electric power grids.War
The probability of a conflict between nations that causes loss of life, instability and potentially catastrophic damage.Existential Risk
The risk of large scale failures or problems that threaten life at the planetary scale such as a sudden change in climate.Notes
Traditionally, insurance companies only insure pure risks. Speculative risks are taken to achieve opportunity such that insuring them doesn't usually make sense. However, products do exist to hedge against certain types of speculative risk such as exchange rate risk.Pure risk is the most likely type of risk to impact individuals who mostly avoid speculative risk if they don't invest or own a small business.Some definitions of pure risk suggest that they are inherently beyond human control. This is clearly not true as fire, diseases and injury can often be prevented or mitigated.| Overview: Pure Risk | ||
Type | ||
Definition (1) | A risk that can only result in losses. | |
Definition (2) | A probability of a loss with no possibility of a gain. | |
Related Concepts | ||
