Overview of Risk Management

Controllable and Uncontrollable

A controllable risk can be reduced or eliminated by actions you take. Uncontrollable risks cannot be reduced by your actions.

Insurance

A form of risk protection that exchanges the uncertainty of a possible large financial loss for a certain smaller payment.

Pure and Speculative Risks

A pure risk presents the chance of loss but no opportunity for gain. Speculative risks offer the chance either to gain or to lose.

Property Risk

A risk that can lead to loss or personal or business property including money, vehicles, and buildings.

Economic Risk

A risk that can result in financial loss, including personal risk, property risk, and liability risk.

Personal Risk

A risk that can result in personal losses such as health and personal well-being.

Pure Risk

A risk that presents the chance of loss but no opportunity for gain.

Liability Risk

A risk that relates to harm or injury to other people or their property because of your actions.

Controllable Risk

A risk that you can reduce or eliminate by actions you take.

Non- Economic Risks

Non-economic risks may result in inconvenience or discomfort but do not have a financial impact.

Risk

The possibility of incurring a loss

Economic Risks

can result in financial loss. There are three categories of economic risks; personal, property, and liability risks

Types of risks

Economic risks, Non- Economic risks, Pure and Speculative risks, Controllable and Uncontrollable risks, Insurable and Uninsurable

Insurable and Uninsurable

If a large number of people face a given risk and the cost of possible losses can be predicted, it is an insurable risk. If a risk is not common or if it is impossible to predict the amount of loss that could be suffered, it is an uninsurable risk.