Which term describes the uncertainty or chance of financial loss?

The term that describes the uncertainty or chance of financial loss is risk. In the context of insurance and finance, risk refers to the potential for an adverse event to occur that could lead to a financial loss. Understanding risk is fundamental to the insurance industry, as it involves assessing the likelihood of various events and determining how to mitigate potential losses.

Other terms, while related, have distinct meanings. For example, peril refers specifically to the actual cause of a loss, such as fire, flood, or theft. A hazard, on the other hand, is a condition or situation that increases the likelihood of a peril occurring but is not a peril itself. Lastly, loss reflects the actual damage or financial detriment that results from a peril. Therefore, while all these terms are interconnected, risk is the overarching concept that embodies the uncertainty associated with potential financial loss.