Meaning of Risk

We live in a risky world. Our society is full of risks. People lose their homes and personal property because of fire, flood, earthquake, hurricane and other natural disasters. There is no single unanimous definition of risk. Risk refers to the possibility that some unfavorable event will occur. Risk is traditionally defined as uncertainty. For example, the risk of cancer for smokers is present because uncertainty is present. Hence, the uncertainty surrounding potential losses is known as risk. The concept of chance of loss is related to risk. Various types of risks exist in the society. These risks have undesirable social and economic effects on the society.