Which coverage type protects against risks that might not occur at all?

The coverage type that protects against risks that might not occur at all is speculative risk. This type of risk involves situations where there is both the chance of a gain and the possibility of a loss. Unlike pure risk, which involves risks that can only result in a loss (such as the risk of fire damage), speculative risk includes scenarios where there’s uncertainty around whether an event will happen and what the financial outcome will be.

For instance, investing in stocks is a speculative risk; you may gain a profit if the investment performs well, or you may incur a loss if it does not. Insurance can provide coverage against certain consequences of such risks, even though the occurrence itself is uncertain.

The other options refer to different types of risks that do not embody the same characteristics as speculative risk. Pure risk involves only the possibility of loss, operational risk relates to failures in processes or systems, and credit risk concerns the potential that a borrower will default on a financial obligation. These types do not embrace the dual possibilities of both gain and loss like speculative risk does.