Definition of Consequential loss:
Indirect loss which accompanies an insured loss, such as loss of earnings resulting from a burnt down business that was insured against fire. Consequential losses are not covered by ordinary insurance policies, unless specifically included on payment of additional premium. See also direct loss, and indirect loss.
A consequential loss is an indirect adverse impact caused by damage to business property or equipment. A business owner may purchase insurance to cover any damage to property and equipment, and may also obtain coverage for secondary losses. A consequential loss policy or clause will compensate the owner for this lost business income. .
This type of insurance is also called business interruption or business income insurance.
How to use Consequential loss in a sentence?
- Consequential losses are the indirect results of property damage.
- Such policies cover losses due to business interruptions.
- These must be insured separately from the policy that covers physical damage to facilities or equipment.
Meaning of Consequential loss & Consequential loss Definition