moral hazard

moral hazard definition - business

moral hazard

The increased likelihood of a negative outcome because of the personal characteristics or history of a situation. For example, individuals who purchase insurance are likely to exhibit more risky behavior because they know another party will cover financial losses.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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