What type of hazard is characterized by individual characteristics that increase loss chances?

The correct answer highlights that a physical hazard pertains to individual characteristics that can increase the likelihood of a loss occurring. Physical hazards include tangible factors related to the individual, such as health conditions, lifestyle choices, and physical characteristics. For example, someone with a history of heart disease or a propensity for engaging in dangerous activities may be considered to have increased risk due to these physical traits.

In contrast, environmental hazards relate to external conditions that can cause harm, such as weather events or unsafe living environments. Economic hazards involve the financial conditions that can affect an individual’s ability to cover losses, while operational hazards are related to the procedures and operations of a business that may lead to risks. Therefore, physical hazards are specifically defined by their direct connection to the individual and their personal characteristics, making it the right choice in this context.