An "insurance peril" inside a commercial insurance policy refers to a specific event or circumstance that could cause loss or damage to the insured property or person and trigger a claim under an insurance policy. This term is typically used in the context of insurance law, where it has a significant impact on the interpretation and enforcement of insurance policies.

In legal terms, a peril is defined as a specific risk or specific danger that is covered by an insurance policy. A peril can be a natural occurrence, such as a fire, flood, or earthquake, or it can be a man-made event, such as theft, vandalism, or civil unrest. The determination of whether a particular event or circumstance qualifies as a peril depends on the language of the insurance policy and the surrounding legal framework.

In simple terms, a peril is best described as a specific danger.

Insurers are generally responsible for identifying and assessing the perils that are covered by their policies, and for setting the premiums that correspond to the risks associated with each peril. In turn, policyholders are responsible for providing accurate information about the risks that they face, and for complying with the terms and conditions of their insurance policies in the event that a covered peril occurs.

Overall, the concept of insurance peril is an essential element of insurance law, as it helps to define the scope and limits of insurance coverage, and provides a framework for resolving disputes between insurers and policyholders.

Last Update: March 2023