In relation to employers' liability insurance, the situation where all employees wear ear protectors in a noisy factory is an example of:

The correct option highlights the distinction between physical hazards and moral hazards in the context of employers' liability insurance. In this scenario, the use of ear protectors in a noisy factory represents a proactive measure taken by the employer to mitigate a physical hazard—excessive noise that can cause hearing damage to employees. This preventive action is a good example of recognizing and addressing a physical hazard, as the wearers of ear protectors are minimizing their risk of injury due to noise exposure.

In contrast, the term "poor" in the provided choice suggests that there is an element of risk that remains. This can relate to the likelihood of employees ignoring safety measures or taking unnecessary risks despite the preventative measures in place, which introduces the moral hazard aspect. While ear protectors are present, if employees do not consistently wear them or if there is a culture of neglecting safety protocols, this can lead to a poor outcome in terms of risk management.

Therefore, the combination of addressing a significant physical hazard with ear protectors while acknowledging that potential lapses in personal responsibility or care from employees exist reflects the essence of the correct answer. This exemplifies a situation where one factor is effectively minimizing risk (the physical hazard managed by ear protectors) while the other (the moral