General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A restaurant kitchen keeps a greasy exhaust vent near an open flame. For a property and health insurer, the greasy vent is best classified as a:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The greasy vent is a physical condition that makes a fire far more likely, so it is a hazard. It is not itself the event that causes loss — the fire is the peril. The situation as a whole is a pure risk because only loss or no loss is possible. Identifying the hazard is what allows the insurer to price or correct the risk.
Why the other options are wrong
- B) The peril is the fire that would cause the loss; the greasy vent merely makes it more probable.
- C) Pure risk describes the loss-or-no-loss character of the situation, not the vent itself.
- D) Speculative risk involves a chance of gain; a restaurant fire offers no gain.
Memory hook
Grease is a hazard that feeds the peril of fire. Conditions, not events, are hazards.