Which term increases the likelihood of a loss?

The term that increases the likelihood of a loss is hazard. In the context of insurance and risk management, a hazard refers to a condition or situation that increases the chance of a loss occurring. This can include physical conditions, such as a slippery floor, or behaviors that can lead to accidents. Hazards do not directly cause loss but rather create a more favorable environment for a loss to happen.

Understanding hazards is crucial in evaluating risks and in the development of strategies to mitigate those risks. By identifying hazards, insurance professionals can better assess potential losses and implement preventive measures. This, in turn, allows them to set appropriate premiums and create coverage that aligns with the potential risks faced by policyholders.

The other terms have distinct meanings: risk involves the uncertainty of a loss occurring, exposure refers to the extent to which a person or entity is susceptible to loss, and peril is the actual cause of the loss, such as fire or theft. Each term plays a role in the overall understanding of insurance and risk, but it is the concept of a hazard that specifically heightens the chance of a loss.