Hazard is defined as any risk that can potentially cause damages or losses covered by insurance. It can come in various forms, from natural events such as fires, floods, and earthquakes, to human-caused incidents like theft, vandalism, and car accidents.

Hazards are divided into two categories: physical and moral.

-Physical hazards refer to tangible conditions or environmental factors that increase the likelihood or severity of a loss.

-Moral hazards, on the other hand, are associated with ethical conduct and behaviors that can affect the probability of a loss.

Hazard insurance is generally associated with property insurance and is designed to protect policyholders against risks that can cause damage or losses to the insured property. It is a type of insurance that is often required by mortgage lenders as a condition for granting a loan.