Which of the following is a category of hazards?

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

Answer: (D)

Hazards are conditions that increase the likelihood or the severity of a loss. The common categories include physical hazards (physical conditions that raise risk, like icy sidewalks), moral hazards (dishonesty or misrepresentation in dealing with insurance), and morale hazards (carelessness or indifference because the insured is covered, such as leaving a door unlocked). Since each of these items is a recognized hazard category, the option that includes all of them is the best choice. (There is also a legal hazard category sometimes noted, but recognizing physical, moral, and morale hazards already covers the idea that these are distinct hazard types.)