Which risk type involves coverage for unusual, one-off cases like hole-in-one insurance?

The concept of coverage for unusual, one-off cases, such as hole-in-one insurance, falls under the category of Unique Risk. This type of risk typically refers to specific and non-standard situations that are not commonly covered by traditional insurance policies. Unique risks often arise in scenarios that are rare or have very special circumstances, which makes them less likely to be addressed by standard insurance products.

For example, hole-in-one insurance is a type of unique risk because it applies only to a single event – a golf tournament – where the rarity of achieving a hole-in-one adds to its unusual nature. Insurers take on these types of risks because they fit into a niche market where traditional insurance does not provide adequate coverage.

Thus, Unique Risk correctly describes the nature of this insurance product, highlighting its tailored approach to non-standard events in contrast to High Capacity Risk, Distressed Risk, or Standard Risk, which deal with more conventional or broader categories of insurance coverage.