What type of risk is characterized by the possibility of loss without the possibility of gain?

The type of risk characterized by the possibility of loss without the possibility of gain is known as pure risk. Pure risk involves situations where there are only negative outcomes or no change at all, such as the risk of property damage, illness, or death. In these cases, the only result can be a loss; there is no chance for financial gain or profit.

This contrasts with other types of risk, like speculative risk, which involves situations where both losses and gains are possible, such as investing in the stock market or gambling. Commercial risk typically pertains to businesses facing uncertainties in their operations and financial dealings, and static risk relates to predictable risks that do not change over time. Understanding these distinctions helps individuals and businesses better assess their risk exposure and implement appropriate risk management strategies.