Definition of moral hazard
: the possibility of loss to an insurance company arising from the character or circumstances of the insured
First Known Use of moral hazard
Rhymes with moral hazard
Legal Definition of moral hazard
1 : the possibility of loss to an insurance company (as by arson) arising from the character or circumstances of the insured <deductibles decrease moral hazard>
2 : the likelihood of investors to take greater risks because of the knowledge that losses incurred as a result of those risks will be covered by another (as a government)
Learn More about moral hazard
Britannica.com: Encyclopedia article about "moral hazard"
Seen and Heard
What made you want to look up moral hazard? Please tell us where you read or heard it (including the quote, if possible).