What is a condition that increases the chance or amount of loss known as?

A condition that increases the chance or amount of loss is known as a hazard. In insurance terminology, a hazard is something that makes a risk more likely to occur or exacerbates the severity of a loss if it does happen. Hazards can take many forms, including physical hazards (like a slippery floor), moral hazards (such as dishonesty), and operational hazards (related to how a business operates).

Understanding hazards is crucial in risk assessment and management, as they directly influence underwriting decisions and the pricing of insurance policies. When assessing risk, insurance professionals will evaluate hazards to determine potential losses and how they can be mitigated.

Peril, on the other hand, refers to the actual cause of the loss, such as fire or theft. Indemnity is a principle in insurance that ensures an insured party is compensated for their losses, which does not specifically relate to conditions that increase risks. A deductible is the amount a policyholder must pay out of pocket before insurance coverage kicks in, which is also unrelated to the concept of increasing the likelihood of loss.