Which type of risk is considered insurable?

The insurable type of risk is classified as pure risk. Pure risks involve situations where there is only the possibility of loss or no loss; there is no chance of gaining anything from the risk. Examples of pure risks include natural disasters, accidents, and illnesses. These risks can be quantified and are typically predictable, allowing insurance companies to calculate potential losses and set premiums accordingly.

In contrast, speculative risk involves the possibility of both loss and gain, such as investments in stocks or business ventures, making it unsuitable for insurance coverage. This distinction is crucial because insurers only cover risks where they can assess and manage potential losses, which is why pure risks are the only type generally considered insurable. The other options listed do not fit the criteria of insurable risk due to their inherent nature and unpredictability.