MANAGEMENT

Detailed explanation-1: -A peril is the direct cause of a loss, or the source of the loss. For example, if your house is damaged by a lightning strike, the lightning strike is considered to be the peril. If your house catches on fire, then fire will likely be considered the peril.

Detailed explanation-2: -Risk, peril, and hazard are terms used to indicate the possibility of loss, and are often used interchangeably, but the insurance industry distinguishes these terms. A risk is simply the possibility of a loss, but a peril is a cause of loss. A hazard is a condition that increases the possibility of loss.

Detailed explanation-3: -Last updated: December 2018. A peril is an event, like a fire or break-in, that may damage your home or belongings.

Detailed explanation-4: -Risk is the chance or probability of a loss, and peril is a direct cause of loss. If, as in my case, which I share starting on page 48 of this issue, there is a flood from a broken pipe, then the peril is water. A hazard is anything that causes or increases the likelihood of a loss.

Detailed explanation-5: -Perils are the events that cause loss or damage to property. Fire, flooding, or vehicle impact are all examples of perils.