PURE RISK Meaning and
Definition
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Pure risk refers to a type of risk that involves only the possibility of loss or no loss at all, without the potential for any gain or profit. It is a situation where there is uncertainty about the occurrence of a specific event, and the outcome is either negative or neutral. Pure risks are typically unforeseen and involuntary, meaning they are not caused by a deliberate action but are instead the result of natural or accidental circumstances.
Examples of pure risks include natural disasters like earthquakes, hurricanes, or floods, as well as fires, accidents, and illnesses. In these situations, individuals or organizations face the potential of suffering financial loss, physical harm, or both. Other examples of pure risks include theft, liability claims, and death.
Pure risks are different from speculative risks, which involve the possibility of either gain or loss, and can be willingly undertaken, such as investing in the stock market or starting a business venture. Pure risks are also distinct from operational risks, which are related to the normal functioning of an organization and can be controlled and managed through preventive measures, planning, and mitigation strategies.
Insurance plays a crucial role in managing pure risks by providing financial protection against potential losses. Individuals and organizations can transfer the risk to insurance companies, which then assume the responsibility of compensating for losses that occur due to pure risks, in exchange for regular premium payments.
Common Misspellings for PURE RISK
- oure risk
- lure risk
- -ure risk
- 0ure risk
- pyre risk
- phre risk
- pjre risk
- pire risk
- p8re risk
- p7re risk
- puee risk
- pude risk
- pufe risk
- pute risk
- pu5e risk
- pu4e risk
- purw risk
- purs risk
- purd risk
- purr risk
Etymology of PURE RISK
The word "pure risk" consists of two components: "pure" and "risk".
1. Pure: The word "pure" derives from the Latin word "purus", which means "clean", "unmixed", or "unadulterated". It came into English via Middle English from Old French, ultimately originating from the Latin term.
2. Risk: The term "risk" originated from the Italian word "rischio" in the late 17th century. "Rischio" itself derived from the Arabic term "rizq", meaning "income". The Arabic term influenced the Old French word "risque", which later influenced the English word "risk".
When combined, "pure risk" refers to a type of risk that presents only the possibility of loss or no loss, without any chance of gain or profit.
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