Peril refers to the cause of a possible loss, such as fire, theft, or flooding. It is not a refusal by an insurance company to pay for a covered loss (option A), nor is it an uncertainty as to loss (option D) or simply another word for risk (option E). Option B is partially correct, as peril can be the cause of risk, but it is not a complete definition.

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Peril Is Defined as

Question 28

Multiple Choice

Peril is defined as

A) the refusal by an insurance company to pay for the covered loss.
B) the cause of risk.
C) the cause of a possible loss.
D) an uncertainty as to loss.
E) risk

Correct Answer: