What type of hazard arises from material, structural, or operational features?

A physical hazard is defined as a risk that arises from the material, structural, or operational features of a property. It involves tangible attributes that can increase the likelihood of a loss occurring. For instance, an outdated electrical system in a building could pose a greater risk for fire, or slippery floors could lead to slips and falls.

This type of hazard is distinct from other types because it is concrete and observable, unlike moral and morale hazards, which are more related to human behavior and attitudes towards risk. Financial hazards often refer to risks that affect an entity's financial stability but do not directly pertain to the physical characteristics of a property. Understanding physical hazards is essential for risk assessment and management in property and casualty insurance, as it involves evaluating how these inherent characteristics may lead to potential losses.