In the context of risk, what term describes risks like vandalism and accidents that can be mitigated by insurance?

The term that identifies risks such as vandalism and accidents, which can be alleviated through insurance, is static risk. Static risks refer to those risks that are relatively unchanging over time and are predictable in nature. These types of risks are often associated with events that do not fluctuate, such as property damage or personal injury, making them suitable for coverage through insurance mechanisms.

Static risks differ from dynamic risks, which are influenced by changes in the economy, technology, or societal conditions and can vary significantly over time. While dynamic risks could lead to fluctuating losses, static risks remain constant and can be calculated more reliably, allowing for better risk assessment and insurance policy formulation.

Elastic and variable risks typically do not have the same characteristics as static risks. Elastic risk pertains to those that can change in response to external conditions but do not fit the predictable and consistent nature required for insurance mitigation. Similarly, variable risks are characterized by their unpredictable behavior, which does not lend itself to reliable insurance coverage in the same way that static risks do.

Understanding the nature of static risk is essential for risk management strategies, particularly when it comes to deciding the best approach to mitigate possible financial losses through insurance.