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9 Examples of a Pure Risk

Pure risk is a risk that can only result in losses. This term is used to differentiate between speculative risks that are taken for a chance of a gain and risks that are inherent in a situation but are never positive. The following are illustrative examples of a pure risk.

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.


The probability of a fire that causes injury, loss of life and damage to property.


The probability of unusually bad weather. This can cause losses for farmers and businesses.


The probability of a disaster such as an earthquake or hurricane.


The probability that you will be a victim of crime such as a theft.


The probability of an accident such as a car accident.


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.


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.


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
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


This is the complete list of articles we have written about risks.
AI Risk
Risk Avoidance
Brand Risk
Budget Risk
Business Risks
Change Risk
Compliance Risk
Concentration Risk
Cost Risk
Country Risk
Credit Risk
Demand Risk
Dread Risk
Economic Risk
Exchange Rates
Existential Risk
External Risk
Financial Risk
Force Majeure
Good Risk
Human Error
Risk Identification
Infinite Risk
Inflation Risk
Inherent Risk
Interest Rates
Internal Risks
Investing Risk
Legal Risk
Liquidity Risk
Model Risk
Moment Of Risk
Natural Disasters
Negative Risk
Operations Risk
Passive Risk
Personal Risk
Political Risk
Process Risk
Procurement Risk
Product Risk
Project Risk
Pure Risk
Quality Risk
Recession Risk
Risk Mitigation
Refinancing Risk
Regulatory Risk
Reputational Risk
Residual Risk
Resource Risk
Revenue Risk
Risk Appetite
Risk Aversion
Risk Examples
Risk Management
Risk Management Process
Risk Matrix
Risk Meaning
Risk Measurement
Risk Taking
Risk Tolerance
Risk Triggers
Risk vs Issue
Risk vs Opportunity
Risk vs Uncertainty
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Security Risk
Settlement Risk
Risk Sharing
Speculative Risk
Strategic Risk
Strategy Risk
Supply Risk
Systemic Risk
Tactical Risk
Taxation Risk
Technology Risk
Risk Transfer
Unforced Error
Upside Risk
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