Probable maximum loss (PML)

A term used in property-risk discussions for an estimated loss under a defined hazard scenario. In seismic reports, the precise metric and modeling assumptions must be stated.

Why it matters

PML is often used loosely. Do not compare reports based only on that label: the loss measure, confidence level, earthquake basis, and treatment of site or structural information can differ. Clarify the metric requested by the lender or insurer.

In practice

A project example

A transaction team receiving a seismic report should identify what the reported percentage measures before treating it as a universal cap on possible damage.

General educational guidance from KOW Building Consultants. Examples are illustrative, not project records. The applicable contract, standard, program, and jurisdiction control the requirements for a specific assignment.