1.4 The Concept of Risk and Risk Management
- The definition of risk - Chance of something going wrong; the danger that injury, damage, or loss will occur.
- The definition of risk as it pertains to insurance - Uncertainty regarding loss; the probability of loss occurring for an insured or prospect.
The loss that is involved with all risks is characterized by a lessening (or disappearance) of value. How risk is treated depends on the situation, the degree of potential loss, and the individual.
