What is the term used to describe the cause of a loss?

The term that describes the cause of a loss is "peril." In the realm of insurance and risk management, perils refer to specific events or situations that can lead to damage or loss. Understanding perils is essential for determining what losses will be covered under an insurance policy. For instance, common perils include fire, theft, flood, and earthquake—each representing a distinct cause of loss that may be insured against.

To further clarify, the term "risk" refers more broadly to the possibility of loss or injury and encompasses the uncertainty regarding potential perils. "Hazard" pertains to conditions or actions that increase the likelihood of a loss occurring, such as poorly maintained property or unsafe practices. "Liability" relates to the legal responsibility one has for causing harm to another person or their property, rather than being a direct cause of loss itself. Understanding these distinctions can help professionals effectively communicate and manage various risks associated with title insurance practices.