What term is used for conditions or situations that increase the probability of an insured loss occurring?

The term used to describe conditions or situations that increase the likelihood of an insured loss occurring is "hazards." In the context of insurance, hazards are classified into three categories: physical hazards, moral hazards, and morale hazards. Physical hazards refer to tangible conditions that increase the risk of loss, such as a slippery floor or an unmaintained roof. Moral hazards involve the insured’s character and behaviors that may influence the likelihood of a claim being made, while morale hazards stem from an individual’s attitude towards risk, leading to careless behavior.

Understanding hazards is essential in risk management and underwriting processes, as they help insurers assess the level of risk associated with insuring a particular individual or property. By identifying hazards, insurers can implement appropriate measures, such as adjusting premiums or offering loss control advice to mitigate the risks.