Pure Risk

The chance of losing income due to an unexpected disabling illness — A pure risk offers only the possibility of loss or no loss — no chance of gain. Unexpected illness and disability fit this definition: the insured either suffers the covered loss or does not, and there is no opportunity for financial gain from the event. Pure risks are the types of risk insurance is designed to handle. The other choices are speculative risks, which include the possibility of gain and are generally not insurable under standard principles.

National insurance concept

Offers no possibility of financial gain, only loss or no loss — A pure risk offers only the chance of loss or no loss - there is no possibility of gain. That makes it consistent with the fortuitous-loss requirement: the insured cannot profit from the arrangement. A speculative risk includes a chance of gain, which would allow the insured to benefit from the insured event and would create a moral hazard, so speculative risks are generally not insurable.

National insurance concept