What term describes the conditions that increase the probability of losses?

The term that describes the conditions that increase the probability of losses is hazards. Hazards are factors that contribute to the likelihood of a loss occurring, and they can take various forms, including physical hazards (like icy roads), moral hazards (such as dishonesty), and legal hazards (related to laws and regulations). Understanding hazards is essential for insurers because they help assess risk levels when underwriting policies and determine appropriate premiums.

In contrast, risks refer to the uncertainty or potential of a loss occurring, while claims are requests made by insured individuals for payment from their insurance policy due to a loss or damage. Liabilities involve the legal responsibilities one may have in relation to their property or actions but do not specifically address the conditions that lead to losses. Thus, the correct understanding of hazards as factors that increase the likelihood of loss distinguishes it from the other terms.