What defines a Physical Hazard?

A Physical Hazard is defined as tangible characteristics of a property or individual that increase the likelihood of a loss occurring. These hazards can include inherent qualities or conditions of an item that, when combined with a potentially dangerous situation, can lead to an accident or damage. For instance, an older vehicle may have mechanical issues that heighten the risk of an accident, or a building may have structural weaknesses that make it more susceptible to damage during a storm.

This understanding of Physical Hazards is crucial for adjusters as it directly influences risk assessments and the pricing of insurance policies. Adjusters need to be aware of these characteristics to evaluate the potential for loss accurately. The other options—such as emotional tension, lack of attention to precautions, or breach of contract—relate to different types of risks or issues in the insurance realm but do not fit the definition of a Physical Hazard. Emotional tension is more psychological, precautionary measures pertain to risky behaviors rather than physical characteristics, and breach of contract relates to legal issues rather than physical attributes that could increase loss frequency.