What type of risk is not covered by insurance companies because it is intentionally caused by the insured?

Speculative risk is characterized as a risk that involves the chance of either loss or gain, meaning that the outcome is uncertain and can result in a profit as well as a loss. This type of risk is not insurable because it involves actions or decisions made by individuals that are effectively gambling on the financial outcomes, such as investing in stocks or starting a business. Since the insured party is making a choice that leads to uncertainty with both potential positive and negative outcomes, insurance companies cannot cover these risks. Insurance is designed primarily to protect against pure risks, which involve only the potential for loss without any opportunity for gain.

Additionally, risks that are intentionally caused by the insured generally fall into the category of liability where the intent to cause harm or loss precludes coverage. For insurance to provide protection, risks must generally be accidental and outside the control of the insured. This further underscores why insurance companies do not cover speculative risks, as they are inherently linked to intentional actions that the insured chooses to undertake.