Page 22 - Insurance Surveyors Book Ebook IC S01

Survey And Loss Assessment IC-S01

Hazards

A hazard is a situation that poses a level of threat to life, health, property, or

environment. Most hazards are dormant or potential, with only a theoretical risk

of harm; however, once a hazard becomes "active", it can create an emergency

situation. A hazard does not exist when it is not happening.

Hazard refers to a condition which influences risks

The physical conditions which increases the risk is known as physical hazard.

Example cement factory situated besides fireworks factory

Moral hazards arises from the dishonesty of the person. If a person wants to take

undue advantage for his own benefit moral hazard arises. For example a person

insures his factory. In order to realise fraudulent claim he sets the factory on fire.

This is an example of moral hazard

It is very difficult to assess moral hazard.

The relationship between hazard and associated risks is a subject of study in the

insurance business

Classes of insurance

Insurance may be broadly classified into life and non-life insurance

Nonlife insurance is also termed as property and casualty insurance in some

countries

Life insurance policies are for longer durations

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