Risk means uncertainty about loss. Two neighbors own similar homes, and neither knows whether a fire will damage her house next year. That uncertainty is the risk. The fire itself is something else (the peril, covered on the next page).
There are two kinds of risk:
Pure risk: only two outcomes, loss or no loss. There is no chance of gain. Examples: an earthquake cracks a foundation, a tenant falls on a broken stair and sues, a kitchen fire stops the rent for months.
Speculative risk: you might gain or you might lose. Examples: a building's market value rising or falling before a sale, buying stock, opening a new business location, gambling.
Insurance is designed for pure risk. After a pure-risk loss, a claim simply restores the insured to where she was. A speculative risk also offers a chance of gain, and insurance is not meant to protect a business bet.
Common trap: thinking that a possible gain makes a risk easier to insure. It does the opposite.