What does Pure Risk mean? Read on to discover the definition & meaning of the term Pure Risk - to help you better understand the language used in insurance policies.
Situation where there is a chance of either loss or no loss, but no chance of gain; for example either a building will burn down or it won't. Only pure risks are insurable because otherwise (where the chance of the occurrence of a loss is determinable) insurance is akin to betting and the insured may stand to gain from it a situation contrary to the most fundamental concept of insurance. Also called absolute risk.
We hope the you have a better understanding of the meaning of Pure Risk.