Which of the following types of risks are considered to be insurable?

Pure risks are the only type of risks generally considered insurable. These involve situations that can result in a financial loss or no loss at all, but where there is no possibility of financial gain. Examples include risks like theft, fire, and natural disasters, where the outcome is either a total loss or no loss. Insurance companies can prepare and price policies that cover pure risks because they can analyze historical data to estimate the frequency and severity of the losses.

On the other hand, speculative risks involve the possibility of gain or loss, such as investing in the stock market or starting a business. These are not insurable because they are inherently uncertain and can lead to profits or losses, making it difficult for insurers to manage the risks involved. The presence of speculative risks could lead to unpredictable financial outcomes for insurers.

Therefore, recognizing pure risks as insurable underlines the fundamental principle of insurance, which aims to provide financial protection against predictable and measurable losses.