What is the uncertainty or chance of a loss occurring?

What is the uncertainty or chance of a loss occurring?

• A. Risk
• B. Pure risk
• C. Insurer
• D. Broker

Answer: (A)

Risk is the possibility that something undesired could happen and is defined by the uncertainty of a loss occurring. In insurance, this idea is about the chance that a loss will happen and can be analyzed, priced, and managed. Pure risk is a specific type of risk where only loss or no loss is possible (no chance of gain), but the overall concept asked for is simply risk, the broader notion of uncertainty about loss. An insurer is the company providing coverage, and a broker is a person who helps you obtain it; neither describes the uncertainty itself.

Risk is the possibility that something undesired could happen and is defined by the uncertainty of a loss occurring. In insurance, this idea is about the chance that a loss will happen and can be analyzed, priced, and managed. Pure risk is a specific type of risk where only loss or no loss is possible (no chance of gain), but the overall concept asked for is simply risk, the broader notion of uncertainty about loss. An insurer is the company providing coverage, and a broker is a person who helps you obtain it; neither describes the uncertainty itself.