In insurance terminology, what is considered a 'peril'?

A 'peril' in insurance terminology specifically refers to a risk of loss or a cause of potential financial harm that can affect an insured property or interest. Perils are events that may lead to claims being made on an insurance policy, such as fire, theft, or natural disasters, but the term itself emphasizes the risk aspect rather than the event or subsequent claims.

Understanding perils is essential in evaluating insurance coverage because policies typically list the specific perils that are covered or excluded. Thus, identifying and delineating the perils is crucial for both the insurer and the insured to assess the level of protection against various risks of loss. This is why 'peril' is fundamentally described as a risk of loss, making the provided answer accurate and fitting within the context of insurance terminology.