Peril
The actual cause of a loss, such as fire, windstorm, death, or illness. A peril is the event that triggers the loss covered by the policy.
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Practice This Concept
An insured regularly burns trash in a dry field near a wooden shed; a stray spark ignites the shed. Which option correctly pairs the peril and the hazard in this scenario?
Peril — fire; hazard — the dry field and wooden shed — The peril is the actual cause of loss — the fire that destroyed the shed. The hazard is the condition that increased the chance of fire — the dry field and the wooden shed. Hazards may be physical (tangible conditions), moral (dishonesty), or morale (carelessness bred by the existence of coverage). Correctly separating peril from hazard is essential to risk classification and loss-prevention analysis.
National insurance concept
A windstorm tears the roof off a house and the homeowner files a claim. For insurance classification purposes, the windstorm is the:
Peril — A peril is the actual cause of loss: wind, fire, theft, or accident. Here the windstorm is the event that caused the damage, so it is the peril. Hazards are conditions that increase the chance of a peril occurring, such as icy roads or faulty wiring. The policy defines which perils are covered, and coverage attaches when a named peril actually causes the loss.
National insurance concept
- General InsuranceAn insured regularly burns trash in a dry field near a wooden shed; a stray spark ignit…
- General InsuranceA windstorm tears the roof off a house and the homeowner files a claim. For insurance c…
- General InsuranceWhich statement correctly distinguishes a hazard from a peril?
- General InsuranceA 'peril,' as used in insurance, is best defined as:
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