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Pure Risk

Pure Risk

Definition

Pure Risk — the risk involved in situations that present the opportunity for loss but no opportunity for gain. Pure risks are generally insurable, whereas speculative risks (which also present the opportunity for gain) generally are not.

Related Terms

Speculative Risk

Uncertainty about an event under consideration that could produce either a profit or a loss, such as a business venture or a gambling transaction. A pure risk is generally insurable while speculative risk is usually not.

Event Risk

Risk of loss associated with fortuitous occurrences (e.g., fires, hurricanes, tortuous conduct). Event risk, which is synonymous with pure risk, hazard risk, or insurance risk, presents no chance of gain, only of loss. The perils covered by traditional property-casualty (P&C) insurance products are within the realm of event risk.

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