Which term describes the chance of a loss occurring?

The term that describes the chance of a loss occurring is "risk." In insurance and risk management contexts, risk refers to the uncertainty surrounding the possibility of a negative event or loss. It encompasses both the likelihood of the event happening and the potential impact of that event, making it a fundamental concept in evaluating and managing potential losses.

In contrast, a peril represents a specific cause of loss, such as fire, theft, or natural disasters. Exposure is the condition of being subject to the possibility of loss, often linked to the assets or liabilities that a person or business may have. Liability relates to the legal responsibility one might have towards another party, often resulting in the obligation to compensate for damages or losses. Therefore, "risk" is the most appropriate and accurate term for describing the chance of a loss occurring.