moral hazard

noun

1. Insurance. an insurance company's risk as to the insured's trustworthiness and honesty.
2. the risk that an individual or organization will act irresponsibly or recklessly if protected or exempt from the consequences of an action.

moral hazard

noun

1. insurance a risk incurred by an insurance company with respect to the possible lack of honesty or prudence among policyholders

Word History and Origins

Origin of moral hazard¹

First recorded in 1915–20

Example Sentences

The prospect of a bailout presents China the same kind of moral hazard that the US, for instance, faced during the banking crisis of 2008.

From Quartz

A moral hazard arises when people no longer feel the need to make careful choices because they expect others to cover the risk for them.

From No Straight News

Five years ago, when the government bailed out Bear Stearns, we heard a lot about moral hazard.

From The Daily Beast

And just as there are few atheists in foxholes, there don't seem to be many moral-hazard-hawks in a financial crisis.

From The Daily Beast

Moral hazard is never desireable, but in the case of homicide, it's horrible indeed.

From The Daily Beast

This is, of course, deeply morally unsatisfying, and it raises real questions about moral hazard.

From The Daily Beast

One would think Israelis would understand the opportunity cost, and moral hazard, of denying these things to Palestinians.

From The Daily Beast

In recent years the insurance companies have come to recognize very clearly what is called the moral hazard in life.

From Project Gutenberg