A loss occurs when a item or property or a right owned by a person or an organization has declined in value or a capacity to perform has been diminished.

If your retail store has had a fire then you have suffer a property loss, damage to the building itself. If the zoning laws have changed since the store opened for business then you could lose the right to reopen at that location. If your manager was injured during the fire then your capacity to reopen could diminish and your manager's capacity to earn wages would be lost or diminished. All of the above are consequences of the fire loss.

You buy insurance to help protect you from the financial consequences of a loss.