General Insurance PrinciplesQuestion 179 of 315
Which of the following is an example of a pure risk that an insurer would accept?
a.Buying stock in a technology start-up
b.Opening a new restaurant in a competitive market
c.The possibility that an insured will die during the policy term
d.Betting on the outcome of a sporting event
Explanation
Only pure risk, which involves the chance of loss or no loss with no opportunity for gain, is insurable. Investments, business ventures, and gambling are speculative risks because they include a chance of gain and are not insurable.
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