2. Risk Application to Scenarios

Question 1

What is the peril and what is a hazard in the following scenario:

Someone is smoking a cigarette in a house that’s insured against fire. If the cigarette is dropped it could start a fire

Answer 1

Peril - the fire itself

Hazard - the act of smoking in the house as it affects the likelihood of a fire

Question 2

What is the following an example of?

Risk of fire that could damage or destroy property

Answer 2

Pure risk

Question 3

What is the following an example of?

Risk of injury to an employee at work

Answer 3

Pure risk

Question 4

What is the following an example of?

Factory fire

Answer 4

Particular risk - would cause localised damage to the factory and possibly surroundings but not the wedding

Question 5

What is the following an example of?

Theft of personal possessions from a home

Answer 5

Particular risk - only affects an individual or family