Highlight four factors that make a risk valid for insurance?

1. Probability of occurrence: The risk must have a reasonable likelihood of occurring in order for it to be considered valid for insurance. Insurance companies assess the probability of a risk based on historical data, industry trends, and other relevant factors.

2. Financial impact: The potential financial impact of the risk must be significant enough to justify the cost of insurance coverage. Insurance is typically used to protect against large, unexpected losses that could have a significant impact on an individual or business's financial stability.

3. Insurability: The risk must be insurable, meaning that it is not too speculative or uncertain in nature. Insurance companies need to be able to accurately assess and quantify the risk in order to provide coverage. Risks that are too unpredictable or uncontrollable may not be suitable for insurance.

4. Legal and regulatory requirements: Some risks may be required by law or regulation to be insured, such as auto insurance for drivers or liability insurance for businesses. In these cases, the risk is considered valid for insurance because it is a legal requirement. Compliance with these requirements may also be necessary for obtaining certain licenses or permits.

1. Probability: The risk must have a quantifiable probability of occurring.
2. Severity: The potential loss from the risk must be significant enough to warrant insurance.
3. Specificity: The risk must be identifiable and measurable.
4. Controllable: The risk must be controllable by the insured.