Page 22 - Ebook IC S01
P. 22

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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