Probable maximum damage

Probable maximum loss (Engl. Probable maximum loss , PML ) is a term from the insurance industry .

In reinsurance in the (insurance) property lines of business , the probable maximum loss measures the deductible and the reinsurance fee (the degree to which the reinsurer participates in the loss risks through proportional [proportional] or non-proportional reinsurance ). In industrial fire insurance, for example, attempts are made to determine the maximum amount of damage that can be expected by determining the damage that has occurred to date, the type of construction, the fire hazard and the location of the building.