Page 12 - RISK Management IC86 Ebook

Risk Management

political forces and can result in either profit or loss. Static
risks are independent of these movements and result only
in loss.

C. Fundamental and Particular Risks
l Fundamental risks are those which affect if not the whole

of society at least a large proportion of it and arise from
natural disasters or changes in the political or economic
system.

l Particular risks are to some degree under the control of the
individual or organization concerned and affect only the party
incurring the risk.

D. "Commercial" and "Insurable" Risk
l The commercial risks are normally associated with

speculative or dynamic risks and are usually regarded as
being uninsurable.
l An insurable risk is a risk that meets the ideal criteria for
efficient insurance. The concept of insurable risk underlies
nearly all insurance decisions.

Types of Risk

Thus the risks faced by the business enterprise fall into three main
categories:

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