Insurable Risk

An insurable risk must meet certain conditions. Some of these conditions are:

The underwriter will consider if perils insured against produce a definite loss that is not under the control of the insured;

There has to be a large enough number of homogeneous exposures subject to the same perils;

The insurance company has to be able to calculate the possible amount of loss with the cost of insurance being economically feasible;

The peril must be have some restriction of affecting all insureds at the same time;

The loss produced by a risk must be definitive and have the potential to be financially serious.

See Also: