Which hazard involves a situation that increases the likelihood of a loss?

The correct choice describes a physical hazard, which is defined as a tangible situation or condition that increases the likelihood of a loss due to an accident or undesirable event. Physical hazards include aspects such as slippery floors, defective machinery, or poor wiring – anything that poses an actual danger to safety or property. These types of hazards are measurable and can often be mitigated through physical changes or improvements.

When considering other options, moral hazards pertain to situations where a person's behavior may change for the worse when they are insulated from risk, such as someone taking greater risks because they have insurance. Legal hazards involve risks arising from the legal environment, such as changes in laws or regulations that could impact liability or insurance practices. Cultural hazards relate to societal attitudes or norms that might influence behavior but do not have a direct, physical connection to the likelihood of loss.

Thus, physical hazards are distinguished by their direct impact on safety and their role in increasing the likelihood of loss due to their tangible and observable characteristics.