What is a specific risk in insurance?
Asked by: Miller Funk Sr. | Last update: July 25, 2025Score: 4.7/5 (75 votes)
What is an example of a specific risk factor?
Company-Specific Risks
Management failing to protect a new product with a patent would be an internal risk, resulting in a loss of competitive advantage. The FDA banning a specific product that a company sells is an example of external business risk. Financial Risk: This relates to the capital structure of a company.
What is a specific risk not covered by an insurance policy?
An exclusion in an insurance policy is a specific risk, loss, or claim that is expressly not covered by the policy.
What is the difference between general risk and specific risk?
Specific risk has some parallels with, but is broader than, credit risk in the sense that it exists whether the position is long or short. General market risk is the risk of a broad market movement unrelated to any specific securities.
What is the specific risk covered by life insurance?
Life Insurance is an example of risk coverage, which pays the sum upon the unforeseen event such as death of the insured occurring. Another example would be Health Insurance, where a payout is made to cover the medical bills resulting from illnesses or injuries.
What is a Particular Risk ? Is it Insurable ? Meaning & Examples
What is specific risk in insurance?
Risk-specific insurance policies provide protection for businesses and individuals against certain identified exposures that might not be covered by a traditional insurance policy. Traditional insurance policies often cover all risks unless the risk is specifically excluded by the policy.
What specific risks are not covered by an insurance policy?
Items such as damage from termites and insects, birds or rodents, as well as rust, rot, mold, and general wear and tear are typically not covered under a homeowners insurance policy. Additionally, damage from smog or smoke resulting from industrial or agricultural activities is excluded.
Which risk is also known as specific risk?
Unsystematic risk, also known as company-specific risk, specific risk, diversifiable risk, idiosyncratic risk, and residual risk, represents risks of a specific corporation, such as management, sales, market share, product recalls, labor disputes, and name recognition.
What is the difference between specific and general wrong way risk?
This may be either due to poorly structured transactions (specific WWR) or market/macroeconomic factors that simultaneously affect the transaction as well as the counterparty in an unfavorable way (general or conjectural WWR).
What is an example of a firm specific risk?
(also called unsystematic, diversifiable, or unique risk). This encompasses all factors that would affect the company's stock price, but not the market in general. For example, the CEO being indicted for fraud or the approval of a new popular pharmaceutical would be firm-specific event.
What type of risk Cannot be insured?
An uninsurable risk could include a situation in which insurance is against the law, such as coverage for criminal penalties. An uninsurable risk can be an event that's too likely to occur, such as a hurricane or flood, in an area where those disasters are frequent.
What is an example of a special risk policy?
Special risk policies differ from limited risk policies to the extent that they provide coverage for unusual hazards not normally covered in other policies such as a dancer insuring her legs, a football player insuring his knees, or a race car driver insuring his life only during the time he races.
Which risks are insurance companies usually unwilling to insure?
While in no way a complete list, the major areas where insurance is unobtainable include reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk.
What is factor vs specific risk?
Active factor risk is the risk due to portfolio's different-than-benchmark exposures relative to factors specified in the risk model. Active specific risk are risks resulting from the portfolio's active weights on individual assets. It is also known as asset selection risk.
What are patient specific risk factors?
“Patient specific risk factors” means factors specific to a patient that may increase the likelihood or severity of a workplace violence incident, such as use of drugs or alcohol, psychiatric condition or diagnosis associated with increased risk of violence, any condition or disease process that would cause confusion ...
What are the 3 categories of risk factors?
Background risk factors, such as age, sex, level of education and genetic composition; Behavioural risk factors, such as tobacco use, unhealthy diet and physical inactivity; and. Intermediate risk factors, such as elevated blood lipids, diabetes, high blood pressure and overweight/obesity.
What is general market risk vs specific risk?
Market risk, or systematic risk, affects the performance of the entire market simultaneously. Market risk cannot be eliminated through diversification. Specific risk, or unsystematic risk, involves the performance of a particular security and can be mitigated through diversification.
What is an example of general wrong-way risk?
For example, a bank would be exposed to general wrong-way risk if a rise in interest rates increased both its exposure to a counterparty and the risk of the counterparty's default. In contrast, right-way risk describes a situation in which credit exposure to a counterparty decreases as its creditworthiness worsens.
What are the three general types of risk?
Systematic Risk – The overall impact of the market. Unsystematic Risk – Asset-specific or company-specific uncertainty. Political/Regulatory Risk – The impact of political decisions and changes in regulation.
What is a synonym for specific risk?
Unsystematic risk is also known as specific risk, meaning the dangers that are unique to a single company or industry.
What is the specific risk approach?
Specific risk, or diversifiable risk, is the risk of losing an investment due to company or industry-specific hazard. Unlike systematic risk, an investor can only mitigate against unsystematic risk through diversification. An investor uses diversification to manage risk by investing in a variety of assets.
How to find company-specific risk?
Quantifying company-specific risk involves assessing unique factors that impact a company's risk profile. This process combines qualitative methods like SWOT analysis and management interviews with quantitative techniques such as beta analysis and cash flow stability assessment.
What type of risk is uninsurable?
A risk that an insurer will not take on. For example, this may be where an event is inevitable (such as a terminally-ill person's death), gradual (such as rust or corrosion) or against the law.
Which risk can not be insured?
While some coverage is available, these five threats are considered mostly uninsurable: reputational risk, regulatory risk, trade secret risk, political risk and pandemic risk.
What is particular risk in insurance?
Particular risk, in contrast to fundamental risk, refers to risks that affect an individual, such as a fire that destroys a family home, theft of a car or robbery. Particular risk can be insured.