Why pure risk matters to a first-time founder
Flood, theft and injury can only leave a company worse off or unchanged. Identifying these exposures helps a founder decide which losses to prevent, transfer through insurance, or absorb, rather than treating every uncertainty as a possible source of profit.
Examples of pure risk
A studio owns €20,000 of filming equipment. A burglary could create a loss of up to €20,000; if no burglary occurs, the studio keeps operating but gains nothing from taking that risk. Secure storage and suitable insurance reduce the exposure.
Common misunderstanding
It is not the same as speculative risk. Launching a new product may generate a profit or a loss, so it is speculative; a warehouse fire offers no upside. Pure does not mean harmless, predictable or fully insurable.
When to use it
Use the label while preparing a risk assessment, reviewing contracts, arranging insurance or deciding how much emergency cash to hold. Revisit it when assets, premises or staffing change. Ignore formal classification only when the potential loss is genuinely trivial.