Pure Risk

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Pure Risk

Any risk in which there is no possibility of gain, only the avoidance of loss. For example, if a company car is stolen, the company endures a loss, but if it is not stolen, the company does not make a gain. Individuals and companies purchase insurance to mitigate the potential damage from a loss from pure risk. It is also called absolute risk.
References in periodicals archive ?
Pure Risks are the subject of insurance risk protection and Takaful.
Takaful insures only Pure Risks and the claims are only payable in the event of Loss to cover repairs, damage, replacement of property, or an agreed fixed amount.
While all have uses, the most commonly cited construction is based on speculative and pure risks.
Although business risk involves both speculative and pure risks, the focus of this study is on pure risk.
But this was the "other side of risk management" the management of speculative risk as opposed to the pure risks of loss with which his tiny department dealt.
First, we have exposures for pure risks and projects for speculative risks.
Risk Management: Management of the pure risks to which a company might be subject.
This may relate to a desire to control one's environment: generally, one must actively seek out speculative risks, whereas one reacts to the pure risks that are effectively thrust upon him or her.
We'll examine not only at the pure risks of loss, but also at the areas of risk where society may win as well as lose.
The responsibilities of risk managers have evolved beyond a concentration on buying insurance to encompass sophisticated approaches to financing loss through various methods that can include self-insurance, larger retentions, contractual transfers, bonds or commercial insurance for losses arising from pure risks.
In fact, utilizing their definition of risk shifting (risk transfer), both the parent and unrelated insureds appear to shift their pure risks (exposures) to the captive and eventually back to the parent as a speculative ownership risk after the economic dynamics of the loss and premium pooling process have been completed.
Personal, Property and Liability Pure Risk generally are insurable.