Types of Risks
This is the possibility of incurring a loss
What is risk?
This is something people buy to protect themselves from big financial losses.
What is insurance?
How many ways to deal with risks
This type of risk may result in financial loss, such as a stock market crash.
What is economic risk?
The company that provides insurance and pays for covered losses.
What is an insurance company?
This method involves not engaging in an activity that has a high risk of loss, like choosing not to skydiving to avoid injury.
What is avoid risk?
A risk that leads to harm or injury to others or their property.
What is liability risk?
The amount of money you pay regularly to have insurance.
What is a premium?
A person buys health coverage to protect against expensive medical bills.
What is insure risk?
A heavy snowstorm forcing a business to close with no chance of making up for lost sales is an example of this type of risk.
What is pure risk?
The official request you make to your insurance company when something bad happens and you need money.
What is a claim?
Instead of getting insurance, a business accepts responsibility for small losses, such as minor repairs.
What is assume risk?
Starting a new business or investing in stocks involves this type of risk, where there is a chance for either gain or loss.
What is speculative risk?
The document that explains what your insurance covers and what it doesn’t
What is an insurance policy?
A company signs a contract with another business to take over financial responsibility for potential damages.
What is transfer risk?