| A | B |
|---|
| Peril | Cause of a loss |
| Hazard | Increases the chance of a loss |
| Basic Perils | Fire Lightning and Internal Explosion |
| Morale Hazard | Created by an individuals tendency to contribute to a loss through carelessness |
| Open Peril Policy | Covers all perils except those specifically excluded |
| Direct loss | Financial loss resulting directly from a loss to property |
| Exclusions | Section of an insurance contract which lists perils that are not covered. |
| Law of Large Numbers | The more examples used to develop any statistic, the more reliable the statistic will be. |
| Physical Hazard | Hazard that arises from the condition, occupancy or use of the property itself. |
| Waiver | The intentional relinquishment of a known right |
