![]() ![]() ![]() While risk has both positive and negative consequences, i.e. Both are different and should not be confused. Therefore, it would not be wrong to say that risk is likelihood while hazard is the likely outcome. However, to measure a hazard in degrees is not at all possible. One can easily measure the risk of something in degrees, high or low.Conversely, hazard pertains to the physical object, situation or setting, which poses a threat to life, property or any other thing. The risk is nothing but the probability that an action or inaction can pose life, property or any other thing to danger.Risk indicates an anticipation of harm, whereas hazard denotes the anticipated cause of harm.On the other hand, hazard implies something which is a root to harm, danger or loss. The term risk is described as a situation susceptible to harm, damage or loss.The following points are substantial so far as the difference between risk and hazard is concerned: ![]() It is the carelessness, which arises due to the presence of insurance. Morale Hazard: Morale hazard indicates an insured person’s attitude towards his/her belongings.These can be disloyalty or biases that raises the probability of loss. Moral Hazard: Moral hazard deals with the human characteristics which have the potential to affect the outcome.Physical Hazard: The hazard which is concerned with the physical condition that adds to the chances of loss.There are three types of hazards, discussed as under: In short, it is the set of conditions, which when combined with other conditions of the environment, can result in loss, damage, liability or any other negative consequence. It is the agent that poses a threat to people, property, environment, etc. Hazards have the capability to create or increase the effect of danger. These do not themselves cause harm or loss rather they have the potential to cause harm. Non-financial Risk: It is one, whose measurement in monetary terms is not possible.īy hazard, we mean those elements which can affect the consequence.Financial Risk: The risk whose result can be measured in monetary terms.Objective Risk: The relative difference of actual loss from the anticipated loss is called objective risk.Subjective Risk: Subjective risk refers to the risk that depends on an individual’s mental state at a particular time.Particular Risk: The risk that adversely affects individuals not the whole economy, e.g.Fundamental Risk: The type of risk which affects a large group of people or the economy as a whole, such as natural calamities or inflation.Static Risk: A situation in which the probability of profit is nil, and there is the only possibility of loss or no loss, is called as pure risk or static risk.Dynamic Risk: Also known as speculative risk, it is a situation wherein there is a possibility of both profit or loss.It is originated from different situations and can be of various types: In finer terms, risk is the likelihood of quantifiable loss, damage, injury, liability or any other negative outcome, resulting from internal or external exposure, which can be mitigated through preventive action. Therefore, the risk is the result of the probability of an event and its outcomes. It is the probability of occurrence of an undesirable or adverse event, although not necessarily so, caused by a particular activity of inactivity. The term ‘risk’ is used to mean the chance of gaining or losing something worthy such as health, wealth, name, environment, etc. ![]()
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