Examples like war and terrorism are primarily classified under which type of risk?

Fundamental risk refers to risks that affect a large segment of the population or an entire economy, often stemming from external and uncontrollable factors. War and terrorism exemplify fundamental risks because they can have widespread impacts that are not limited to individual businesses or entities but affect entire nations and communities. Such risks typically arise from events beyond individual control, leading to significant social, economic, and legal repercussions.

In contrast, particular risks affect only specific individuals or businesses, like damage to a personal property. Financial risks detail uncertainties regarding financial transactions and investments, often influenced by market conditions. Operational risks relate to internal failures within an organization, such as system breakdowns or fraud. The broader scope and uncontrollable nature of war and terrorism clearly categorize them under fundamental risk, making it crucial for businesses and governments to develop strategies for mitigating or managing these types of risks.