In the insurance business, risk can best be defined as?

Risk in the insurance context primarily refers to the potential financial loss that can occur from uncertain events. This encompasses the uncertainty regarding whether and when a certain event might happen, such as illness, disability, or death, all of which can lead to financial repercussions for individuals and businesses. The focus on uncertainty about financial loss is critical because it forms the basis of how insurance is structured—protecting individuals from the adverse financial impacts that may arise from unexpected events.

Option C captures this essential idea effectively, emphasizing the financial aspect rather than just any general uncertainty or sharing of possibility. In insurance, agents assess risk in order to offer coverage that mitigates the financial burdens that policyholders may face in the event of a loss. Understanding risk as the uncertainty regarding financial loss allows both insurers and insured to manage potential losses more strategically.