Loss

A loss is the actual financial damage that results from a covered event and triggers an insurance claim. This can include legal fees, settlements, property repair costs, medical expenses, or lost business income. Your insurance policy specifies which types of losses are covered and which are excluded, so not every financial setback qualifies as a covered loss.

A loss is the actual financial damage that results from an incident, while a claim is a demand—such as a lawsuit or written demand for damages—made against you that triggers your insurance coverage, which you then report to your insurer. For example, a data breach is the incident, the resulting legal liability and costs are the loss, and a customer's lawsuit against you (which you report to your insurer) is the claim.

Business insurance covers financial losses specified in your policy, typically including property damage, liability settlements, legal defense costs, business interruption income, and certain employee injuries. The specific types of covered losses depend on your policy type—general liability covers different losses than cyber insurance or E&O. Always review your policy's insuring agreements and exclusions.