Soon, people began to use the word hedging to describe steps that could be taken to protect against financial loss.

Hedging is common among gamblers who make large bets. A gambler bets a lot of money on one team. But, to be on the safe side, he also places a smaller bet on the other team, to reduce a possible loss.

You might say that someone is hedging his bet when he invests in several different kinds of businesses. One business may fail, but likely not all.