In the context of an insurance policy, the causes of loss that are insured against are called what?

In the context of an insurance policy, the causes of loss that are insured against are referred to as perils. Perils represent specific risks or events that can cause damage or loss to insured property or interests. For example, common perils in property insurance include fire, theft, windstorm, or vandalism.

Understanding perils is crucial during the claims process, as policyholders must demonstrate that the loss they have sustained is a result of an insured peril for the insurance company to provide coverage and compensation. This is distinct from exclusions, which outline what is not covered by the policy, liabilities, which refer to legal responsibilities for damages or injuries to others, and conditions, which specify the duties and responsibilities of the insured and insurer during the policy period. Identifying and understanding perils helps insured parties know the coverage provided by their policy, ensuring they are adequately protected against anticipated risks.