Which of the following describes a hazard category related to the insured's attitude or morale?

• A. Physical hazard
• B. Moral hazard
• C. Morale hazard
• D. All of the above

Answer: (C)

Hazard categories distinguish how different factors raise the chance of a loss. Morale hazard specifically refers to a careless or indifferent attitude toward risk on the part of the insured, which can increase the likelihood or severity of a loss. A physical hazard is a real-world condition that makes a loss more likely due to something like a slippery floor or faulty wiring. Moral hazard relates to dishonest or fraudulent behavior that increases loss risk. Since the question focuses on attitude or morale, the best fit is morale hazard. The option describing all hazards isn’t accurate because not every hazard is about attitude.