Simply put, risk arises from an event (death, sickness), activity (mining, deep-sea fishing) or a condition (disability, unemployment) which carries a probability of financial loss. Anything uncertain that can cause financial loss or a risk.
Individuals, households, communities, societies, nations, all are exposed to some or the other risks. As families, we are largely exposed to the risks of life (untimely death of a breadwinner), living (sickness) and livelihoods (loss of livelihood due to disability, natural calamities, economic conditions). All of them can inflict heavy financial impact on the affected family.
As human beings we try to cope with risk in different ways.