Business Risk

Last Updated: October 9, 2017

Definition - What does Business Risk mean?

Business risk is the possibility that a company will not make the profits it intends to, but will instead make a significantly smaller profit or will actually experience a loss. In the context of insurance, there are many different types of commercial insurance that a business can purchase to hedge its business risks.

Insuranceopedia explains Business Risk

There are a wide variety of factors that can contribute to the success or failure of a business over time. For example, sales figures, competition, interruptions, the economy at large, and other factors can all affect profits. Commercial insurance can help to protect against business risk. Business interruption insurance for example, can protect against losses in the event that business is interrupted for some unforeseen reason. Without business interruption insurance, interruptions could substantially reduce business profits.

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