SEL vs. SUL: Mastering Seismic Risk Assessments
Seismic events pose real financial and structural risks for buildings, especially in earthquake-prone regions. To understand and manage that risk, lenders, insurers, and building owners often evaluate SEL vs. SUL—two seismic loss metrics used to estimate potential earthquake damage and financial exposure.
Seismic risk assessments help decision-makers understand how a building is likely to perform during an earthquake. These evaluations influence lending terms, insurance coverage, retrofit requirements, and long-term planning. While Probable Maximum Loss (PML) was once the industry standard, today most stakeholders rely on Scenario Expected Loss (SEL) and Scenario Upper Loss (SUL) for more consistent, scenario-based insight.
This guide explains SEL vs. SUL, how each metric is used, and why the distinction matters when evaluating earthquake risk and planning mitigation strategies.
What are PML, SEL, and SUL?
Before comparing SEL vs. SUL, it helps to understand how these metrics evolved and what each one represents.
First, let’s discuss the differences between PML, SEL, and SUL.
Probable Maximum Loss
What does PML mean?
PML is an older metric used to estimate the potential maximum loss a building might experience during a seismic event. While it provided a general benchmark, PML was often interpreted differently across reports, lenders, and insurers. That lack of consistency made it difficult to use PML as a reliable planning tool.
As a result, the industry has shifted mainly toward more clearly defined metrics: SEL and SUL.
Scenario Expected Loss
SEL represents the average or expected damage a building may experience during a defined earthquake scenario. Losses are typically expressed as a percentage of the building’s replacement value and are commonly calculated at a 50% probability of exceedance.
In practical terms, SEL helps stakeholders understand what a likely earthquake loss might look like. It is often used for:
- Financial planning and budgeting
- Investment analysis
- Insurance premium evaluation
- Retrofit prioritization
By offering a realistic view of expected damage, SEL supports balanced, informed decision-making.
Scenario Upper Loss
SUL—sometimes referred to as PML90—represents a more conservative estimate. It reflects losses at a 10% probability of exceedance, meaning there is a 90% confidence that actual losses will not exceed this value.
SUL is commonly used when stakeholders need to understand a worst-case scenario, such as:
- High-value or mission-critical properties
- Risk-averse lending or insurance requirements
- Regulatory or compliance-driven evaluations
While more conservative than SEL, SUL provides important context for managing downside risk.
The Importance of SEL vs. SUL in Seismic Risk Assessment
Choosing between SEL vs. SUL depends on the goals of the assessment and the level of risk tolerance involved. In many cases, both metrics are reviewed together to provide a more complete picture of seismic exposure.
Here are some differences between SEL vs. SUL.
|
SEL Typical Use Case |
SUL Typical Use Case |
|
| Risk Assessment |
Helpful in understanding average, expected damage, and overall risk |
Used to evaluate worst-case loss scenarios |
| Investment Decisions |
Helps investors assess realistic financial exposure |
Supports conservative decision-making for high-value assets |
| Insurance Planning |
Often used to inform premium calculations |
Helps determine maximum coverage needs |
Key Considerations of SEL vs. SUL
- Risk Tolerance: SEL supports balanced planning; SUL is better suited for worst-case preparedness
- Regulatory Requirements: Some lenders or jurisdictions may require SUL
- Financial Planning: SEL often provides a clearer picture of expected costs
- Insurance Strategy: Many insurance decisions rely on both metrics
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Use SEL when you need an average risk assessment, financial planning, investment decisions, or insurance premiums based on expected losses.
Use SUL when you need to understand the worst-case scenario, ensure regulatory compliance, manage high-value properties, or determine maximum insurance coverage.
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How SEL and SUL Affect Construction and Retrofit Decisions
Design and Material Choices
Building design plays a direct role in SEL and SUL outcomes. Flexible systems, proper load paths, and well-anchored foundations can significantly reduce seismic damage. Material selection and detailing matter—not just for performance, but for long-term risk reduction.
Retrofitting Existing Structures
For existing commercial buildings with high SEL or SUL values, seismic retrofitting is often the most effective way to reduce risk. Common measures include adding bracing, reinforcing connections, and improving overall structural continuity.
While retrofitting requires upfront investment, it is often far less costly than repairing significant earthquake damage—or dealing with extended downtime afterward.
A Practical Approach to Managing SEL and SUL
Understanding SEL vs. SUL helps building owners, lenders, and insurers make better-informed decisions about risk, investment, and resilience. These metrics don’t just describe potential losses—they help guide smarter planning and more predictable outcomes.
Saunders Seismic works with engineers, owners, and stakeholders to implement retrofit solutions that meaningfully reduce SEL and SUL ratings. Our focus is on practical, build-ready work that improves safety, limits disruption, and supports long-term asset protection.
Trust Saunders Seismic to provide tailored solutions that keep your buildings safe and compliant. Contact us today for service in California, Washington, Oregon, Nevada, and Utah.