What does probable maximum loss mean?

Definitions for probable maximum loss
prob·a·ble max·i·mum loss

This dictionary definitions page includes all the possible meanings, example usage and translations of the word probable maximum loss.


  1. Probable maximum loss

    Probable maximum loss (PML) is a term used in the insurance industry as well as commercial real estate. Although the definition is not consistent in the insurance industry, it is generally defined as the value of the largest loss that could result from a disaster, assuming the normal functioning of passive protective features (e.g. firewalls, nonflammable materials, flood defences etc.) and proper functioning of most (perhaps not all) active suppression systems (e.g. sprinklers). This loss estimate is always less than (or in rare cases, equal to) the maximum foreseeable loss, which assumes the failure of all active protective features. Underwriting decisions can be influenced by PML evaluations, and the amount of reinsurance ceded on a risk can be predicated on the PML valuation. PML estimation is also used to determine the extent of losses in Chemical & Petrochemical Industries. Insurers and Reinsurers across the world use PML to estimate loss during events such as vapour cloud explosions (VCE) or high pressure rupture (HPR).

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  1. Chaldean Numerology

    The numerical value of probable maximum loss in Chaldean Numerology is: 8

  2. Pythagorean Numerology

    The numerical value of probable maximum loss in Pythagorean Numerology is: 5


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"probable maximum loss." Definitions.net. STANDS4 LLC, 2024. Web. 16 Jul 2024. <https://www.definitions.net/definition/probable+maximum+loss>.

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