2. Insurance basics

2.1 Insurability of a risk

Insurance companies distinguish between :

• speculative risk (also known as "entrepreneurial" risk), resulting from a deliberate decision by the entrepreneur to achieve his or her objectives (for example, the commercial failure of a product);

• pure risk (also known as "insurable" risk), the consequence of accidental or fortuitous events (e.g. fire, miscalculation).

Since pure risk is beyond the control of the decision-maker (fortuitous risk), it alone can be covered by an insurance policy.