Pure Loss Risks:

• A. Involve the Possibility for Gain
• B. Involve No Possibility for Gain
• C. Are Never Insurable
• D. Are Speculative in Nature

Answer: (B)

Pure loss risks are those that could lead to a loss or nothing happening, with no chance to gain anything financially. In the world of risk management and insurance, this is the type of risk that insurers typically cover because the downside is predictable and there’s no upside to exploit.

So the statement that pure loss risks involve no possibility for gain matches the definition. It distinguishes them from speculative risks, which include both potential losses and potential gains. The idea that pure losses are never insurable is incorrect, since pure risks are the classic type of risk that insurance is designed to transfer. And calling them speculative in nature is also incorrect, because speculative risks inherently involve the possibility of both gain and loss.