RISK

I can describe types of risk and explain ways to handle risk

By. Courtney Hughes

Risk

Risk is the possibility of incurring a loss.

Example of risk- An example of risk would be if a student chooses to go hang out with friends all night when they should really be studying to make good grades.



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Economic risk

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Non-economic risk

Non-economic risk may result in embarrassment or inconvenience without a financial

impact.

Examples of non-economic risk- An example of non-economic risk would be a cheerleader going to tumble and falling, there was not financial impact but she would be embarrassed.


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Pure risk

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Speculative risk

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Controllable risk

Controllable risk occurs when conditions can be controlled to lessen the chance of harm.

Example of controllable risk- One controllable risk people face is how to save their money, if they keep it all with them and not at a bank they are at risk of them loosing it.



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Uncontrollable risk

Uncontrollable risk cannot be controlled or reduced by your actions.

Example of uncontrollable risk- An uncontrollable risk people face is what insurance company they choose to use. If that insurance company fails, there was nothing the person could do since that are not in charge of the company.


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Insurable risk

Insurable risk meets the criteria of an insurance company for coverage.

Example of insurable risk- An insurable risk is a home or car, they can be covered but something could still happen to them.


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Uninsurable risk

Uninsurable risk is a type of risk that the possible amount of loss is simply unpredictable.

Example of uninsurabe risk- An uninsurable risk would be a pandemic.


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4 ways to manage risk

1. Avoid

2. Transfer

3. Insure property

4. Insure business operations