RISK
risk,n.1. The uncertainty of a result, happening, or loss; the chance of injury, damage, or loss;
esp., the existence and extent of the possibility of harm <many feel that skydiving is not worth the
risk>. See ASSUMPTION OF THE RISK . 2. Liability for injury, damage, or loss if it occurs <the
consumer-protection statute placed the risk on the manufacturer instead of the buyer>.3.Insurance.
The chance or degree of probability of loss to the subject matter of an insurance policy <the
insurer undertook the risk in exchange for a premium>. Cf. PERIL(2). [Cases: Insurance 1542.
C.J.S. Insurance § 67.] 4.Insurance. The amount that an insurer stands to lose <the underwriter
took steps to reduce its total risk>.5.Insurance. A person or thing that an insurer considers a hazard;
someone or something that might be covered by an insurance policy <she’s a poor risk for health
insurance>. [Cases: Insurance 1542(3).] 6.Insurance. The type of loss covered by a policy; a
hazard from a specified source <this homeowner’s policy covers fire risks and flood risks>. [Cases:
Insurance 2097. C.J.S. Insurance §§ 282–283, 395, 860.] — risk,vb.
absorbable risk.A potential loss that a corporation believes that it can cover either with
available capital or with self-insurance.
assigned risk.One who is a poor risk for insurance but whom an insurance company is forced
to insure because of state law. • For example, an accident-prone driver is an assigned risk in a state
with a compulsory motor-vehicle-insurance statute. [Cases: Insurance 1528. C.J.S. Insurance §
63.]
classified risk.In life and health policies, the risk created by a policyholder’s substandard
health or other peril.
noninsurable risk.A risk for which insurance will not be written because the risk is too
uncertain to be the subject of actuarial analysis.
pure risk.A risk that always results in a loss.
shifting risk.The changing risk covered under an insurance policy insuring a stock of goods
or similar property that varies in amount and composition in the course of trade. [Cases: Insurance
2138(1). C.J.S. Insurance § 417.]
speculative risk.A risk that can result in either a loss or a gain. [Blacks Law 8th]