What do we call a condition that could result in a loss?

The condition that could result in a loss is best described as a peril. A peril specifically refers to the immediate cause of the loss, such as fire, theft, or natural disasters. In the context of insurance, identifying perils is crucial because these are the events against which individuals seek to protect themselves through purchasing insurance policies.

While hazard, exposure, and risk are also related concepts in insurance, they serve different roles. A hazard refers to something that increases the likelihood of a peril occurring, exposure relates to the potential for loss, and risk is the possibility of loss itself. However, none of these capture the specific concept of a condition leading directly to a loss as effectively as peril does.