Arkansas Insurance Adjuster Practice Exam

Which of the following would be considered an insurable risk?

1. A mountain range

2. A football stadium

3. A partnership

4. A suburb

The correct answer is: A football stadium

An insurable risk is a potential loss that can be covered by insurance. This means that there must be a chance of loss or damage that can be quantified in terms of money, the loss cannot be catastrophic, and the loss must be definite and able to be calculated. Option A, a mountain range, cannot be insured because it is a natural occurrence that is not within human control and cannot be quantified in terms of monetary value. Option C, a partnership, is a legal agreement and does not involve loss or damage that can be covered by insurance. Option D, a suburb, does not meet the criteria for insurable risk because it is an entire area and not a specific loss that can be calculated. Option B, a football stadium, is a man-made structure that can be insured in case of damage or loss. Therefore, it is the only option that would be considered