What does Risk mean? Read on to discover the definition & meaning of the term Risk - to help you better understand the language used in insurance policies.
Risk is the probability that a particular loss will occur. Risk is very relevant for insurance companies because it can determine whether or not they will have to spend money satisfying a claim. Risk is also relevant for policyholders because if they represent a higher risk, then that can mean they may need to pay higher premiums.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
c: The sum for which something is insured.
We hope the you have a better understanding of the meaning of Risk. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for: