What is a defining characteristic of a stock insurance company compared to a mutual insurance company?

A defining characteristic of a stock insurance company is ownership by shareholders. In a stock insurance company, the capital is primarily raised through the sale of stock, and the owners, or shareholders, are individuals or entities that invest in the company for a return on their investment. This structure allows stockholders to potentially receive dividends from the company's profits, as well as have a say in corporate governance depending on the number of shares they hold.

This ownership model contrasts with mutual insurance companies, which are owned by the policyholders themselves. In mutual companies, the policyholders have a vested interest in the organization’s success, as they may receive dividends or reductions in premiums depending on the company's performance, but they do not have the stockholders' financial stake or equity structure that stock companies have.

The other options, such as being non-profit or not covering risks, do not accurately describe stock insurance companies. Stock insurance companies are indeed for-profit entities, and they provide coverage for various risks, just as mutual insurance companies do. However, the primary distinction lies in their ownership structure, which is where the identification of stock insurance companies shines through.