- Pure risk
The characteristic of pure risk is that it holds out only in the possibility of loss or no-loss and it’s very unlikely that any measurable benefit will arise from a pure risk. It includes such incidents as fire, accident, bankruptcy and so forth.
- Speculative risk
Speculative risk is a risk that is undertaken because of a conscious choice and has the potential to result in uncertain degree of gain or loss. However, there are three possible outcomes in speculative risk which are loss, gain, and staying even with neither gain (profit) nor loss. Investing in the stock market is one of the examples of speculative risk.
- Particular risk
Particular risk is the possibility of loss which can arise from a situation related with any specific individual events: such as unemployment, robbery or theft. E.g. any losses arising out of robbery or theft will directly affect an individual.
- Fundamental risk
Compared to particular risk, the fundamental risk will have a huge impact as it affects a large group of people or companies and can be caused by natural or social events. Such as natural disasters, government policies, and so forth.
- Insurable risk
Insurable risk is a risk that conforms to the insurance policy specifications in such a way that the criterion for insurance is fulfilled.