Skip to content

What are the difference between direct and indirect loss?

Asked by: Niculina Kohlstruk

asked in category: General Last Updated: 1st May, 2020

What are the difference between direct and indirect loss?

Fire and smoke damage would count as a direct loss. So would theft, or a car crashing through the front window. Indirect losses, often referred to in business insurance policies as “consequential losses,” are not inflicted by the peril itself but describe losses suffered as a result or consequence of the direct loss.

Accordingly, what is an example of an indirect loss?

Example. If a restaurant’s oven catches fire and sustains damage, that damage is a direct loss. If smoke from the fire damages the restaurant, causing operations to cease for weeks, the loss of business revenue is an indirect loss.

Similarly, what does direct loss mean? Definition. Direct Lossloss incurred due to direct damage to property, as opposed to time element or other indirect losses. Also used sometimes by captives to identify losses under policies directly insured by the captive, as opposed to losses assumed from a front company.

Subsequently, question is, what is direct physical loss or damage?

One court has held that a direct physical loss “contemplates an actual change in insured property then in a satisfactory state, occasioned by accident or other fortuitous event directly upon the property causing it to become unsatisfactory for future use or requiring that repairs be made to make it so.”

What is direct loss in contract law?

Direct and indirect lossesDirect loss is loss arising naturally, according to the usual course of things, from the breach of contract itself, and is therefore foreseeable and recoverable.

24 Related Question Answers Found

What is another name for an indirect loss?

Is loss of profit a direct loss?

Is loss of income a direct loss?

What does indirect damages mean?

How do you define risk?

Are lost profits direct or indirect damages?

What do you mean by consequential loss?

What is pure risk?

What is direct loss and expense?

What is proximate cause in insurance?

What does Time Element mean?

What type of a loss is it when there is a second financial loss that results from a covered direct loss such as loss of rent or loss of business income )?

Is consequential loss the same as indirect loss?

What is concurrent causation?

Leave a Reply

Your email address will not be published.