What does "risk" mean in the context of insurance?

What does "risk" mean in the context of insurance?

Elliot Matloff (President and Broker, The Matloff Company) gives expert video advice on: What is an "underwriter"?; What is "coverage"? and more...

Risk in the context of insurance is the potential of something bad happening, typically. If you own a car, the risk is that you might have a car accident, or someone might steal it, or somebody might vandalize it. If it's your life, there's a risk that you might pass away. In fact everyone passes away eventually, but there's a risk to a person who's overweight and has had recent cancer of dying sooner than someone who is in perfect health, eating properly, and is a normal height and weight. So the insurance company looks at each person individually, and they look at your risk, because we all have risk. If you are a business and you have worker's compensation insurance, and they see that you have all kind of dangerous things on the floor somebody could trip on, you become a bigger risk to the insurance company and they might charge you a much higher premium, or they may not accept you at all because you haven't satisfied certain requirements.