What type of risk can lead to extensive financial claims in case of an accident?

Liability risks refer to the potential for financial claims against an individual or organization due to harm or injury caused to a third party. When an accident occurs, liability risks can result in extensive financial obligations because they often involve costs associated with legal defense, settlements, or judgments awarded to the injured party. Companies and individuals must manage these risks to protect their financial well-being and ensure they have the necessary insurance coverage to handle potential claims.

In contrast, loss prevention focuses on strategies to minimize the chance of accidents or losses. Retention hazards pertain to the risks that an organization chooses to retain or self-insure, which does not directly relate to the potential for claims resulting from accidents. Lastly, indirect losses are secondary financial impacts resulting from an event, such as lost income following an accident, rather than direct claims arising from liability.