Meaning of Physical Hazard:
Physical Hazards are physical issues that enhance the possibility or chances of loss. They identify the dangers of the subject of insurance which can be ascertained by the risk insection.
It is an agent, factor, or circumstance that can cause harm with contact.
In other words, physical hazards are defined as the risk associated with bodily or material nature and process of the subject matter of insurance and inherent factors related thereto, capable of giving rise to or aggravating claims or it is a risk related to material or tangible aspects surrounding a subject of insurance that are likely to influence the happening and or extend of financial loss.
Also, Physical hazards in most cases may be qualified either as good or bad and it is technically wrong to qualify physical hazards as large or small. It is a concept, which can be described but never quantified.
Given details of a proposed risk or opportunity to carry out a survey, an underwriter can make a fairly accurate assessment of the physical hazard presented.
Causes of Physical hazard:
Some of the major causes of physical hazards in insurance are as follows.
a. Burglary insurance
b. Fire insurance
c Personal accident
d. Motor insurance
e. Marine insurance
f. Life Assurance
g. Liability insurance.
This is one of the major causes of bad physical hazards in the contract of insurance business.
Burglary insurance will either be private premises, like a residential house or a business premises.
For burglary insurance of private dwelling houses, features to be considered in respect in respect of physical hazard includes the type of construction, nature of burglary protection installed on doors and windows overlooking outside; the location of the premises and the nature of contents; the proposer is insurance and claim history.
With regard to burglary insurance of commercial premises, the major classification in connection with the physical hazard is according to trade, location, and whether the property is occupied or not.
As another cause of physical hazard in the insurance contract, the main factor includes the following construction number of floors, use content in private dwelling houses, methods of lighting or heating, cleanliness, types of processes carried on in the premises for industrial establishments proximity to a five brigade, available of water supply, availability of fire fighting equipment and other safety feature like firestop wall.
Personal accident insurance:
The occupation of the insured or prudent proposer and his age, the type of machinery used, the general safety in the place of work, are possible indicators of physical hazard in some accident insurance.
Also, a coal miner presents more hazardous risk than a watch repairer for the coal miner works underground with greater attendant risk.
In motor insurance, the physical hazard will bear on the age of the car, make a tonnage of the motor vehicle, the class of use private or commercial, the age, driving experience and record of the driving, the type of make of car, the ease of obtaining spare part in event of accidental damage to the car and geographical area in which the car is normally driven.
The type of engine used to propel the vessel, the type of merchandise inside the cargo, the geographical area is season involved for the voyage for it is more hazardous to undertake a voyage in winter than during summer in temperate countries, and the material composition of the vessel or ship could reveal the physical hazards associated the marine insurance.
Liability Insurance: This will depend on the type of liability insurance. In the case of public and products liability insurance.
The main classification is the proposer’s trade or business, and such businesses like food and drug manufacture get the proposer connected with the public and thus incur greater risks.
The issue of Holidornide, which caused the birth of lots in point. The employer’s trade and employees’ occupation are the main classification in employers liability insurance.