Which of the following increases the chance of a risk occurring?

The concept of a physical hazard is critical in understanding risk management and insurance. A physical hazard refers to a condition or situation that increases the likelihood of a loss occurring. This can include various factors such as the physical environment, equipment, or even the condition of property. For instance, if a building is situated in a flood-prone area, that geographic characteristic poses a physical hazard, making it more likely that flooding will result in damage.

In the context of insurance, recognizing physical hazards is essential for underwriters when assessing risk and determining appropriate coverage and premiums. The presence of a physical hazard can lead to a higher probability of claiming losses, thus directly affecting the risk profile of insured properties.

While exposure refers to the extent of being subjected to potential losses, it does not inherently increase the chance of a risk occurring; it simply describes the level of risk involved. Reinsurance, on the other hand, is a risk management technique used by insurers to transfer some of their risks, and loss refers to the economic impact suffered due to claims but does not inherently increase the chance of risks.