Physical Hazard

What It Is:
Risks based on tangible, measurable attributes of an insured item or property.

Further Explanation:
Physical hazards are determinable factors that can influence the likelihood or severity of a loss. They often relate to the innate properties of what’s being insured.

• Security protection at a shop: A shop with state-of-the-art surveillance and alarms presents a lower physical hazard for theft. The more robust the security measures, the less likely a loss will occur from break-ins.
• Construction of the property: Buildings made with non-combustible materials, or with advanced fire-suppression systems, have a decreased risk of fire damage. Therefore, a well-constructed property offers a more favorable physical hazard profile.
• Age of a proposer and type of car for motor insurance: Newer cars with enhanced safety features or older drivers with more experience might present lower risks. These factors are concrete and can be evaluated against data to determine potential loss.