What type of risk affects only individuals rather than communities or entire countries?

Particular risk refers to risks that impact specific individuals or entities, rather than the wider community or society as a whole. This type of risk is usually associated with individual circumstances or events, such as personal property damage, health issues, or loss of income due to specific causes. Since it is confined to individuals or specific entities, it contrasts with risks that may involve larger groups or systems.

In insurance and risk management, understanding the distinction between particular risks and other types of risks is crucial. Unlike systemic risk—which encompasses the potential for widespread failure that can affect economies or markets—particular risk focuses on isolated events. This is significant for personal lines insurance, which often covers individual needs rather than collective outcomes.

Thus, recognizing that particular risk is unique to an individual reinforces the importance of individual assessments in personal insurance policies, allowing for tailored coverage that addresses the unique needs and situations of policyholders.