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Risk is a part of life and business. Business risk is an event or circumstance leading to the possibility of losses related to the assets and the profits potential of a firm. A company must protect itself against risks by identifying factors and taking the necessary steps to avoid issues that contribute to business failure. Being proactive in managing these risks makes a massive difference to the success of ones company. According to Longenecker et al. (2020), Thats why an understanding of business risks, the basic principles of a sound insurance program, and the various types of business insurance is so important. (p. 532). Understanding these risks is essential in assisting a business owner when dealing with the various qualms that a business encounters. There are two categories of business risks: market risk and pure risk. Market risk is the uncertainty associated with any investment decision. For example, investing in the stock market can result in loss or gain. This type of risk is uninsurable. On the other hand, pure risk can be insured, involves the possibility of a loss or no loss, and there is no potential gain. Insuring a vehicle is an example of pure risk. The different types of risk include property risks, liability risks, and personnel risks. Property risks involve potential damage to, destruction, or loss of real property, like land and buildings, and personal property such as machinery, equipment, furniture, and vehicles, to name a few. Liability risks arise from statutory liability, contractual liability, or tort liability. They come about when a business or any of its representatives violate laws that cause damage to the affected party. Personnel risks, such as premature death, poor health, inability to work, and insufficient retirement income, directly affect individual employees and indirectly impact the business. The ways to manage risk in a business are risk control and risk financing. Risk control minimizes loss through prevention, avoiding hazardous activities, and reducing risk. Risk financing makes funds available for losses that will not be eliminated through risk control. Risk financing involves transferring risk to another party; through purchasing insurance, or retaining the risk within the firm by financing loss through cash flows.