CIIN Certificate CF3 Practice Questions - CIIN Certificate CF3 - Insurance Underwriting Process (Nigeria) Exam

In insurance terminology, which statement correctly describes the relationship between a peril and a hazard?

A peril is the physical cause of loss; a hazard is a condition that increases the likelihood or severity of that loss A hazard is the event that causes loss; a peril is the financial consequence of that event Peril and hazard are interchangeable terms for any insured event A peril is always man-made; a hazard is always a natural phenomenon

Correct Answer:

A peril is the physical cause of loss; a hazard is a condition that increases the likelihood or severity of that loss

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