Ace the 2025 CPHRM Challenge – Rock Your Health Care Risk Management Skills!

Pure risk refers to situations that involve only the potential for loss or no loss, with no opportunity for financial gain. This type of risk is characterized by events that are unpredictable and typically beyond the control of the individual or organization. Examples include natural disasters, accidents, and death.

The correct answer highlights that pure risk can be managed through insurance policies. Insurance is fundamentally designed to provide financial protection against pure risks, allowing individuals and organizations to transfer the financial burden of potential losses to the insurer. This relationship underscores the nature of pure risk as being insurable, contrasting with risks that involve the possibility of profit, which is characteristic of speculative risks.

The focus on pure risks being manageable through insurance clarifies why they are fundamental to the practice of risk management in healthcare and other industries, emphasizing the importance of financial safeguards in the face of unavoidable uncertainties.