Insurance is a legal contract between the insured and the insurance company. The insured transfers risk to be ensure and the insured pays a premium to the insurer. In return for the premiums the insured receives a promise from the insurer to pay in the event the insured experiences covered loss Risk and be divided into four broad categories. Briefly describe each of these categories and provide at least one example of each REMINDER - all forum responses should be at least 250 words. CATEGORIES OF RISK Insurance is simply a legal contract between the insured and the insurance company (insurer), by which the insured transfers risks to the insurer and the insured pays a premium to the insurer. In return for the premiums, the insured receives a promise from the insurer to pay in the event the insured experiences a covered financial loss. There are certain types of risks that can be transferred to an insurance company, while other risks are not transferable because they are not insurable. These uninsurable risks are discussed later in this chapter. Risk is defined as the chance of loss, uncertainty associated with loss, or the possibility of a loss. Risk can be divided into four categories: Pure and Speculative Risk Subjective and Objective Risk Fundamental and Particular Risk Non-financial and Financial Risk