Which type of risk is typically insurable?

Pure risk is the type of risk that is typically insurable because it involves situations that can lead to only loss or no loss, without any possibility of financial gain. Examples of pure risk include risks related to natural disasters, accidents, theft, or liability. Insurers can evaluate these risks and set premiums accordingly, allowing them to provide coverage for potential losses.

In contrast, speculative risk involves potential for both loss and gain, such as investments in stocks or business ventures, which are not insurable because they are based on uncertain outcomes that could result in profit as well as financial loss. Political risk and market risk also fall under non-insurable categories, as they involve complex variables outside the control of insurers and can lead to unpredictable outcomes. Therefore, the insurability of a risk is determined by its nature and the certainty of outcomes associated with it, which makes pure risk the only type suitable for coverage.