Which key factor distinguishes pure risk?

Pure risk is defined by the presence of uncertainty surrounding a loss or adverse event, where only the possibility of loss exists and no chance for financial gain is involved. This characteristic is what makes pure risk distinct from other types of risk, such as speculative risk, which can involve both the potential for loss and gain.

For example, in the context of insurance, pure risks include scenarios such as fire damage to property, theft, or health-related events. Each of these examples involves situations where the outcomes can result only in a loss, with no opportunity for profit or financial benefit. Thus, selecting the answer that indicates that pure risk offers only the chance of loss, without any potential for gain, correctly highlights the essence of what pure risk entails. Recognizing this fundamental aspect helps individuals understand the types of risks typically managed by insurance and the importance of coverage to mitigate the potential financial consequences of such occurrences.