Insurance premiums are based on risk calculations. Uncertainty is doubt about the outcome of an event because you are unable to predict what will happen. You have this doubt whether or not you know the calculated risk factors. It depends on your experience, attitudes, and feelings at a particular time. When a farm manager considers an area of risk, blend factors of both risk and uncertainty in arriving at a conclusion.
Risk management is a personal matter and can vary between farmers.
Risk is present for all farm businesses. Pure Risk - Pure risk involves only the chance of a loss. You can neither control nor predict the occurrence of a pure risk event. Accidents, floods, windstorms, and fire are examples of pure risk events. Personal injury, disability, and death are examples.