What is an example of an indirect loss?
Asked by: Ms. Carolina Mitchell | Last update: January 12, 2026Score: 4.9/5 (29 votes)
What are direct and indirect losses?
Direct losses refer to the physical or structural impact caused by the disaster such as the destruction of infrastructure caused by the force of high winds, flooding or ground shaking. Indirect effects are the subsequent or secondary results of the initial destruction, such as business interruption losses.
What is an example of indirect damages?
Without limiting the generality of the foregoing, Indirect Damages shall include loss of profits, loss of revenue, loss of production, loss of earnings, loss of contract, cost of capital, cost of purchased or replacement capacity or energy, loss of any use of any facilities or property owned, leased or operated by any ...
What is an example of an indirect liability?
An investigation of your car accident may reveal that the responsible party lost control of their vehicle due to a faulty component such as the brakes or steering wheel. As a result, the vehicle manufacturer could be indirectly liable because a product defect caused the accident.
What is the indirect losses sample clause?
In no circumstances will the Authority be liable to the Provider, whether in contract, tort (including negligence) or otherwise, for any loss of profit, loss of revenue or for any indirect or consequential loss arising out of a breach of this agreement, or otherwise in connection with this agreement (provided that this ...
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Which is the best example of an indirect loss?
Business interruption insurance might also cover losses due to having to temporarily shut down from a government-mandated road or bridge closure that impacts your business. Another example of an indirect loss would be the need to rent a car while one's car is being repaired following a car accident or damage.
Can you claim for indirect losses?
Indirect loss is not merely speculative but also unpredictable and lawyers can be reluctant to advise a client to accept an unquantified and unidentified risk. But, the fact that indirect loss is speculative and unpredictable does not mean that indirect loss will always be recoverable by the claimant.
What is an example of indirect?
Examples of indirect in a Sentence
We took an indirect route. These plants grow best in bright indirect light. He gave only vague, indirect answers to our questions. They used indirect methods of investigation.
Which homeowners coverage covers indirect losses?
Under the Homeowners policy, which coverage provides indirect loss coverage? Coverage D provides for the insured's additional living expenses necessitated by damage to the dwelling, an example of indirect loss.
What is an example of an indirect expense?
Utility bills, rental costs, salaries, depreciation, office supplies, and legal charges are a few examples of indirect expenses. Companies must bear these charges to keep running smoothly regardless of the products they manufacture or sell.
What type of damages are paid in response to an indirect loss?
Commonly, consequential damages include property damage, personal injury, attorneys' fee, lost profits, loss of use, liability of buyer to customers, loss of goodwill, interest on money withheld by customers, and damages related to third party claims.
Which of the following is an example of indirect compensation?
Examples of indirect compensation include, among other things, health care benefits, vacation/paid time off, meals, retirement funds, company cars, childcare and private school tuition, and stock options.
What is an indirect cause of damage?
Indirect causation exists when an intervening force comes into play after the defendant has committed his negligent act and this intervening force either extends the plaintiff's injuries or combines with the defendant's act to produce plaintiff's injuries.
What are examples of indirect damages?
So if a software developer has a contract to repair a broken website by a certain date and fails to do that, the indirect damages to the client would include, for example, the value of all the lost business from visitors to the client's website who were very unimpressed by the still-broken website.
Is loss of income an indirect loss?
Indirect damage loss is loss that results from direct damage to property—for example, loss of income and increased expenses resulting from the insured's inability to use the damaged property while it is being repaired or replaced.
What are indirect expenses and losses?
Indirect expenses are shared across various activities and cannot be traced back to a particular cost object. Examples: Common direct expenses include raw materials, direct labor, and manufacturing supplies. Indirect expenses cover costs like rent, utilities, administrative salaries, and office supplies.
What is the difference between direct loss and indirect loss?
Thus, insurers distinguish between two types of damage: primary or direct damage, such as destruction by fire, and indirect or consequential loss, such as a cessation of business due to the fire.
What losses are not covered under a homeowners policy?
Important: Read exclusions in your insurance contract. Earthquake, flood, mold, earth movement, and “wear and tear” are some of the perils that are usually excluded.
What is indirect property loss?
A loss or damage that results from an insured's inability to use his/her property because of direct loss to the property of others.
What is indirect rule examples?
Indirect rule was a system of governance used by imperial powers to control parts of their empires. This was particularly used by colonial empires like the British Empire to control their possessions in Africa and Asia, which was done through pre-existing indigenous power structures.
What are examples of direct vs indirect?
Direct speech involves quoting someone's exact words, using quotation marks. Indirect speech reports someone's words without using their exact phrasing, often changing verb tense and pronouns.
What type of loss is not recoverable?
By definition, therefore, consequential losses are exceptional and often not recoverable. Direct loss is the natural result of the breach in the usual course of things. Most foreseeable kinds of loss are direct, including financial losses such as loss of profits and loss of business or goodwill.
Which homeowners coverage is designed to cover indirect losses?
Final answer: In dwelling and homeowners policies, 'Loss of Use' is the coverage for indirect losses. These are expenses beyond the direct physical damage to the property, such as additional living expenses while the property is being repaired. The other options typically cover direct physical damages.
What type of damages are awarded to cover indirect and foreseeable losses?
Consequential compensatory damages, also known as special damages, may also be available in certain situations. These damages cover indirect losses that were foreseeable at the time the parties entered into the contract but were not directly related to the breaching party's failure to fulfill their obligations.