Generally defined as a condition that increases the likely number of losses or the likely severity of a loss.
Cause of Loss
Referred to as perils.
The cause that sets in motion an unbroken chain of events leading to the loss. It may or may not be the immediate cause of the loss.
The policy includes a list or description of the perils that are covered. Insured has burden of proof for claims.
Policies commonly provide for named perils, such as theft, burglary, and robbery. Some insurance policies also describe coverage for a peril commonly known as mysterious disappearance.
A loss to covered property by any cause is covered unless the insurer can prove that the loss was caused by a peril on the excluded list.
Difference in Conditions
A difference-in-conditions (DIC) policy is a property insurance policy that is purchased in addition to a commercial property policy to obtain coverage for perils, such as flood and earthquake, that the commercial property policy does not cover.
The theory which holds that, if a given loss involves more than one peril, and at least one of the perils is covered by the policy, then the loss is covered—even if the policy specifically excludes another cause of the loss.