In insurance, a physical hazard is any tangible characteristic of property, people, or activities that increases the probability of loss due to a peril. These hazards are related to the physical condition of the property or people and can contribute to the likelihood and severity of a loss.

Examples of physical hazards include:

• Faulty wiring that increases the likelihood of a fire

• Slippery floors that increase the likelihood of a slip and fall accident

• Defective machinery that increases the likelihood of an accident or injury

• Proximity to flood-prone areas that increases the likelihood of flood damage

Key features of physical hazards in insurance include:

• They are tangible characteristics that are visible or measurable.

• They increase the likelihood of loss due to a peril.

• They can affect the severity of a loss.

• They can be mitigated or eliminated through risk management techniques such as repairs, maintenance, or protective measures.

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