Which type of risk can be insured against?

The ability to insure against a type of risk depends on whether the risk is quantifiable and manageable within the principles of insurance. Theft or fire to business premises is a tangible risk that can have direct financial consequences. Insurance companies can assess the likelihood of these events occurring and can set premiums accordingly. This type of risk is insurable because it involves specific, identifiable losses that can be covered by policy terms.

In contrast, losses due to bad decisions, changing consumer preferences, and the entry of new competitors are risks that stem from business environment dynamics and strategic choices rather than from insurable events. These risks involve uncertainties that cannot be easily quantified or managed through insurance, making them uninsurable. Thus, the ability to insure against theft or fire, which involves specific property loss, underscores why this is the correct choice.