What term is used to describe the potential cause of losses in insurance?

The term that describes the potential cause of losses in insurance is "Peril." In the context of insurance, a peril refers to specific events or situations that can lead to a loss covered by an insurance policy, such as fire, theft, or natural disasters. Understanding perils is essential for both insurers and policyholders, as it helps in assessing what risks are being covered and how they might affect the insurance coverage.

The other terms, while related to the concepts of insurance, refer to different aspects. Risk pertains to the uncertainty regarding financial loss and encompasses a broader spectrum of potential events, while liability refers to the legal responsibility for causing harm or damage, often resulting in a claim being made against an insurance policy. Hazard, on the other hand, refers to conditions that increase the likelihood of a peril occurring, such as poor maintenance of a property that raises the risk of a fire. Each of these terms plays a significant role in understanding insurance, but "peril" specifically identifies the event that can result in a loss.