Which of the following best describes the relationship between hazard and risk?

The relationship between hazard and risk is best characterized by the idea that a hazard increases the likelihood of a particular risk. A hazard refers to a condition or situation that has the potential to cause harm or loss. In the context of insurance and risk management, understanding hazards is essential because they often contribute to the overall risk exposure.

When a hazard is present, it creates a scenario where the likelihood of a specific adverse event occurring—such as property damage or personal injury—becomes more probable. For instance, if there is a hazardous condition like a faulty wiring system in a building, the risk of fire or electrical shock increases due to that hazard. Therefore, identifying and understanding hazards is crucial for risk assessment and mitigation strategies.

This distinction highlights that not all risks are equal, as the presence of specific hazards can elevate the level of risk in a given situation. Thus, the correct answer emphasizes the direct correlation between the presence of hazards and the increase in risk.