What term describes a physical condition that increases the chance of loss?

The correct term for a physical condition that increases the chance of loss is a "Physical Hazard." A physical hazard refers specifically to tangible conditions or features that contribute to a risk of damage or loss. This could include environmental factors like a property's location in a flood zone, the presence of flammable materials, or other physical characteristics that elevate the likelihood of a claim being made.

Understanding physical hazards is crucial for public adjusters as they assess a situation and determine the scope of coverage. Proper identification of these hazards allows professionals to make informed decisions about risk management and insurance claims.

Other terms presented, such as exposure or environmental risk, do relate to risk assessment but do not specifically define the tangible conditions that create a risk of loss in the same direct manner as a physical hazard. Operational hazards pertain more to process-related issues within a business or activity rather than the physical characteristics of a location or item.