WHAT IS THE DIFFERENCE BETWEEN RISK, HAZARD, AND PERIL

J.O. EMMANUEL
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In our everyday life, the words risk, hazards, and perils are often used interchangeably.

However, as you will know in this post, the three terms do not exactly mean the same thing.

Risk refers to the possibility of an adverse event or loss occurring. It is a possibility that a loss will occur.

Examples of risks are speculative risks, pure risks, fundamental risks, and specific risks.

Peril refers to the cause of a loss. It is the major or direct cause of a loss.

Peril is also defined as the circumstance or event that causes loss. 

Fire, accident, and theft are just a few examples of peril.

A hazard is a condition that creates or increases the chance of a loss. It is any situation or event that increases the likelihood of a loss occurring.

Hazard makes the loss more likely to happen and, they can sometimes increase the severity of the loss.

A naked wire within the home, which raises the risk of a fire accident, is an example of a hazard.

What is the difference between risk, hazard, and peril?

The major difference between risk, hazard, and peril is that risk refers to the probability of a loss occurring, while hazard is anything that makes a loss more likely to occur, and peril is the event or situation that causes the loss to occur.

To understand the difference between risk, hazard, and peril, let's take the example of a motor car. When using a motor car, there is a possibility that an accident will occur (the risk).

If the owner of the car drives his car on the road despite knowing that his car has a bad tire, then that constitutes a hazard of driving a motor car.

The peril of driving a motor car is the motor accident that could result from driving the car.

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