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Hence, now it is easy to understand that when used in

conjunction with peril and hazard, we find that risk means the

likelihood that the hazard will indeed cause the peril to operate

and cause the loss. For example, if the hazard is low lying house

and the peril is flood, then the risk, is the likelihood that the

goods/ item lying on the floor will indeed be a loss due to

floods.

To simplify it further, here are some examples of link between

risk, peril and hazards:

RISK PERIL HAZARD

Loss due to death Cirrhosis of liver Excessive alcohol

abuse

Loss or damage to Fire in premises Smoking going on

factory property near explosive

material left

unattended

Damage to car Car accident Letting a person

without valid

driving license,

drive the car

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