An important characteristic of an insurable risk is that the loss must be:

An important characteristic of an insurable risk is that the loss must be significant. For a risk to be insurable, it typically needs to involve potential losses that are substantial enough to warrant insurance coverage. Insurers assess the risk associated with certain events and determine the adequacy of premium pricing, which is based on the expected severity of losses.

If a loss is too minor, it may not justify the administrative costs of insurance; therefore, insurers generally would not offer coverage for such negligible risks. Additionally, if losses are considered frequent or predictable, they may fall outside the framework of typical insurable risks because they do not reflect the element of uncertainty that insurance is designed to help manage. Control of a risk is also important, but it does not directly correlate with the requirement for the loss to be significant. Insurable risks must reflect both significant potential losses and a certain degree of unpredictability to be considered valid for insurance purposes.