A case study of seismicity induced by hydraulic fracturing operations near Fox Creek, Alberta, is used to evaluate the extent to which the potential for induced seismicity at a site alters the pre‐existing hazard from natural seismicity. We find that in low‐to‐moderate seismicity environments, the hazard from an induced‐seismicity source, if one is activated in close proximity to a site, can greatly exceed the hazard from natural background seismicity at most probabilities of engineering interest, over a wide frequency range. The most important parameters in determining the induced‐seismicity hazard are the activation probability and the b‐value of the initiated sequence. Uncertainty in the value of the key input parameters to a hazard analysis implies large uncertainty (more than an order of magnitude) in the likelihood of strong shaking.

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