What is a pure loss?
Asked by: Enrico Kemmer | Last update: December 29, 2025Score: 4.6/5 (17 votes)
What is an example of a pure financial loss?
Examples of pure economic loss include the following: Loss of income suffered by a family whose principal earner dies in an accident. The physical injury is caused to the deceased, not the family. Loss of market value of a property owing to the inadequate specifications of foundations by an architect.
What is a pure economic loss?
Pure economic loss means monetary loss which has not been caused by personal injury or damage to other property. In a construction context, the most obvious example is the cost of carrying out works to remedy defects themselves. The general rule is that pure economic loss is not normally recoverable in tort.
What is an example of a pure risk?
Pure risk refers to risks that are beyond human control and result in a loss or no loss with no possibility of financial gain. Fires, floods and other natural disasters are categorized as pure risk, as are unforeseen incidents, such as acts of terrorism or untimely deaths.
What is the difference between pure financial loss and consequential loss?
Pure economic loss is usually defined as financial loss that excludes property damage. In cases of pure economic loss, the only thing that is lost is money. Consequential economic loss is loss that is directly caused by another event, including events like property loss or defective products.
Pure Economic Loss | Law of Tort
What is pure loss?
Under a reinsurance agreement, the pure loss cost is the ratio of reinsured losses to the ceding company's earned, subject premium for that agreement, less expense loading.
What is an example of a consequential loss?
Consequential loss, which is also known as indirect loss, is any loss which may arise from the specific context of the case (e.g., if a part within a machine is not delivered on time and the company which owns the machine claims it cannot operate its whole factory, and therefore cannot pay its workers, as a result of ...
What two kinds of losses must insurers calculate?
A loss in insurance terms is a reduction in asset or property value or damage of said assets or property due to an accident, natural disaster, man-made disaster, or other risks. Losses fall into one of two categories in terms of property insurance: direct loss or indirect loss.
Is gambling a pure risk?
A pure risk includes any uncertain situation where the opportunity for loss is present and the opportunity for financial gain is absent. Speculative risks are those that might produce a profit or loss, namely business ventures or gambling transactions.
Which risk is not a pure risk?
Since there is the chance of a large gain despite the high level of risk, speculative risk is not a pure risk, which entails the possibility of only a loss and no potential for gains.
How to answer a pure economic loss question?
Pure economic loss refers to financial loss that is not accompanied by any physical damage or personal injury. In other words, it is an economic loss that is suffered by a person or business as a result of another party's negligence, but where there is no accompanying physical harm or damage to property.
What is the Hedley Byrne principle?
Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4
This landmark case established the principle of pure economic loss in English law. The House of Lords judgment provided that a duty of care arose when pure economic loss was provoked by certain conditions.
What is pure financial loss insurance?
Pure Financial Loss means pecuniary loss, cost or expense incurred by any person other than the Assured or an Employee not consequent upon Advertising Injury, Bodily Injury Personal Injury and/or Property Damage.
What is an example of loss in real life?
If a salesperson has bought a textile material for Rs.300 and has to sell it for Rs.250/-, he has gone through a loss of Rs.50/-.
What is an example of a pecuniary loss?
Pecuniary damages are damages that have a discernible, quantifiable monetary amount attached to them. Examples include medical bills, property damage and loss of wages.
What is considered a financial loss?
A financial loss is a financial damage suffered by one or more people because of faulty service performed by an organisation. The loss is not directly attributable to personal injury or damage to property.
Is gambling a waste of money?
Each game you play at a casino has a statistical probability against you winning, which makes gambling an inadequate option for those looking to boost their income. While the house advantage varies for each game, it ultimately helps ensure that the casino won't lose money over time.
What are the three types of pure risk?
Pure risks can be divided into three different categories: personal, property, and liability. Many cases of pure risk are insurable.
Is gambling a sin yes or no?
Although there are some who experience gambling as something rewarding and fun, it tends toward being highly addictive and potentially ruinous. The Bible doesn't call gambling a sin as such, although the Bible warns against the love of money and get-rich-quick schemes.
Can Pure risk be insured?
Only pure risks are insurable because they involve only the chance of loss. They are pure in the sense that they do not mix both profits and losses. Insurance is concerned with the economic problems created by pure risks. Speculative risks are not insurable.
What is an indirect loss?
Consequential loss (also known as indirect loss) arises from a special circumstance of the case, not in the usual course of things.
What is the maximum amount an insurer will pay in case of a loss is known as?
Limit of Liability - The maximum amount of coverage to be paid to an insured or on behalf of an insured by an insurance company in the event of a loss.
Can you sue for consequential damages?
Consequential damages may be awarded in your case if you were monetarily injured by your business partner or other contractual partner who violated an important contract clause. If the other party in a deal breached the contract, you could sue them for monetary awards and more.
What is a foreseeable loss?
In the insurance sector, a maximum foreseeable loss is used to refer to the highest possible loss that may occur to a policyholder. The level of loss may be caused by various adverse events, such as fires, explosions, or equipment failure.
What is a special loss?
Unlike general damages, which compensate for pain and suffering, special damages are based on actual monetary losses and expenses. They are designed to put you back in the financial position you would have been in if the accident hadn't occurred.