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Question: 1 / 470

What is the term for increasing the likelihood or severity of a loss?

Peril

Exposure

Hazard

The term that refers to increasing the likelihood or severity of a loss is "hazard." In the context of insurance, a hazard is a condition or situation that increases the chance of loss occurring due to a peril. It can be classified into different categories such as physical hazards (actual conditions that increase a risk), moral hazards (behavioral factors that might lead to a higher chance of loss), and morale hazards (carelessness or a lack of concern for loss consequences).

Considering the other terms, peril refers to the actual cause of a loss, such as fire or theft. Exposure is the potential for loss or the extent to which a property or individual is at risk. Risk encompasses the overall probability and impact of loss, but it is broader than just increasing likelihood or severity. Therefore, the most precise term for the condition that heightens the chances or impacts of loss is a hazard.

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