Catastrophic Loss

Catastrophic loss refers to a sudden, severe event or series of events that cause extensive damage, financial loss, or disruption. Examples include natural disasters like hurricanes, earthquakes, or large-scale accidents. These losses typically exceed usual risks and can have widespread impacts on individuals, businesses, and communities. Insurance companies often set aside special funds or reinsurance to cover such extraordinary claims, recognizing that these events are rare but can be financially devastating. In essence, a catastrophic loss is an unexpected, high-impact incident that significantly surpasses normal risk levels.