What is another term for a cause of loss in insurance?

In the context of insurance, a cause of loss is specifically referred to as a peril. A peril represents the actual event or situation that leads to a loss or damage, such as fire, theft, or flooding. Understanding this term is vital as it helps policyholders identify what risks are covered under their insurance policies.

While "risk" encompasses the potential for loss, it does not pinpoint a specific event. "Hazard" refers to conditions or situations that make a peril more likely to occur, further complicating the insurance landscape, but again does not directly represent a cause of loss. "Liability," on the other hand, pertains to the legal responsibility for causing harm or damage to another party, which is separate from the causes of loss themselves. Thus, peril serves as the precise term for what directly leads to a loss in the insurance realm.