3. a. What is the difference between peril and hazard?
A peril is something that can cause a loss. Examples include falling, crashing your car, fire, wind, hail, lightning, water, volcanic eruptions, choking, or falling objects. A hazard is any condition or situation that makes it more likely that a peril will occur. Hazards include: * physical hazards, like ice on the sidewalks, smoking, or skydiving; * moral hazards (most of which are avoidable), like dishonesty (such as burning down the warehouse when your company goes bankrupt to collect insurance money or buying insurance on someone with yourself as beneficiary and then killing them); and * morale hazards, like a careless attitude since "insurance will pay for it." b. Define physical hazard, moral hazard, attitudinal. hazard, and legal hazard. (1) Physical hazard: physical environment which could increase or decrease the probability or severity of a loss. It can be managed through risk-improvement, insurance policy terms, and premium rates. (2) Moral hazard: attitude and ethical conduct of the insured. It cannot be managed but can be avoided by declining to insure the risk.

Read more: http://www.businessdictionary.com/definition/hazard.html#ixzz3PRGECZxS 4. a. Explain the difference between pure risk and speculative risk
1. Pure Risk situations are those where there is a possibility of loss or no loss. There is no gain to the individual or the organization. WHERE AS Speculative Risks are those where there is a possibility of gain as well as loss. The element of gain is inherent or structured in such a situation. 2. Pure risks are generally insurable while the speculative ones are not. 3. The conceptual framework of the risk pooling can be applied to the pure risks, while in most of the cases of speculative risks where it is not possible. However, there may be