Glossary

The Private Securities Litigation Reform Act of 1995 is a law aimed at reducing the number of claims against corporate directors and officers that allege securities violations.

A privilged communication is a communication made between parties during certain "special" relationships that is protected from disclosure to third parties.

Privity of contract is the relationship that exists between two parties by virtue of their having entered into a contract. Privity of contract provides that a contract cannot confer rights or impose obligations upon any person who is not a party to the contract.

Probability is a numerical measure of the chance or likelihood that a particular event will occur.

Probability analysis is a technique used by risk managers for forecasting future events, such as accidental and business losses.

Probability of ruin is the percentile of the probability distribution corresponding to the point at which capital is exhausted.

Probably maximum loss (PML) is a property loss control term referring to the maximum loss expected at a given location in the event of a fire at that location, expressed in dollars or as a percentage of total values.

A probationary period refers to a provision in some disability income policies stipulating that benefits will not be payable for sickness commencing during a specified time period (e.g., 15–30 days) after inception of the policy.

Process refers to the whole course of proceedings in a legal action. Process also is the legal means by which a person is given notice of a legal proceeding or required to appear in court.

Process risk is a way of expressing the variation in potential outcomes based on the size of the sample.