In insurance terms, “losses” are defined somewhat more specifically than they are in everyday speech.
Losses, in insurance, represent a loss of wealth. In more clear terms: A loss is the difference between an insurance policyholder’s current wealth and their presumed state of wealth before being hit by a peril.
There are many ways in which losses can be defined, and a loss may or may not affect the policyholder’s actual financial assets (their bank account balance, for example). Reductions in the value of property (like a building or a car) due to theft or legal expenses may also be defined as “losses”.
A general insurance policy protects the insured person against possible losses.
Swiss insurance coverage compared