This chapter has focused on the concept of risk, which is the probability or threat of damage, injury, liability, loss or any other negative occurrence that is caused by external or internal vulnerabilities and may be avoided through pre-emptive actions. In relation to insurance, three pairs of risk have been discussed: pure and speculative, financial and non-financial, and fundamental and particular. Five risk-management techniques have been explained: avoidance, control, acceptance, transference and sharing. To decide which of these techniques to apply, we first need to identify and analyse the risk. At the end of the chapter, a discussion is provided on the concept of managing risk in Islam. The following examples of risk management in Islam have been mentioned: daman khathar ul tareeq, daman ul darak and aaqila.