Direct Loss Insurance Definition
Direct Loss Insurance Definition. A proper definition of ‘direct loss’ is loss proximately caused by the peril insured against, and the term ‘proximate cause’ as applied in insurance cases…. For example, damage to property of a business firm would be a direct loss, but the loss of business earnings because of a fire on its premises would be an indirect loss.
For example, a fire within the wall structure of a house causes the drapes. Also used sometimes by captives to identify losses under policies directly insured by the captive, as opposed to losses assumed from a front company. Most property policies today require direct physical loss or damage, as distinguished from indirect, or consequential, loss or damage.
For Example, Damage To Property Of A Business Firm Would Be A Direct Loss, But The Loss Of Business Earnings Because Of A Fire On Its Premises Would Be An Indirect Loss.
The “‘requirement that the loss be ‘physical,’. In a clause limiting liability for breach of contract, the same interpretation as above is normally applied, as explained in practice note, limiting liability: A loss that stems directly from an unbroken chain of events leading from an insured peril to the loss.
A Direct Loss Refers To Physical Or Financial Loss Or Injury As A Direct Result Of An Unbroken Chain Of Events Or A Proximate Cause That Led To A Risk Covered By An Insurance Policy.
A business owner may purchase insurance to cover any damage to property and equipment, and. Loss that is not a direct result of a peril. A loss is the injury or damage sustained by the insured in consequence of the happening of one or more of the accidents or misfortunes against which the insurer, in consideration of the premium, has undertaken to indemnify the insured.
Insurance Against Direct Loss Or Damage, Consequential Loss, Loss Due To Liability For Damages, Or Loss Due To Dishonesty Or Failure Of Others To Perform Their Duty
A direct physical loss occurs when a “change in insured property [that was originally] in a satisfactory state,” is damaged by an accident or other fortuitous event which causes the property to become “unsatisfactory for future use absent repairs.”. Also used sometimes by captives to identify losses under policies directly insured by the captive, as opposed to losses assumed from a front company. In insurance, direct loss coverage refers to damage immediately inflicted by a disaster, accident or other event, known in insurance language as perils.” direct loss example if a tornado strikes a town and takes the roof off the building, a direct loss would include damage to the structure, as well as to equipment, furniture, inventory or other items inside.
Historically, In The Insurance Industry, “Direct” Loss Is Distinguished From “Indirect” Loss Of Use.
[i]n a suit on a policy insuring for ‘direct loss’ caused by the named peril, a proper definition of proximate cause would be that cause which in a natural and continuous sequence unbroken by any new and. Fire damage to a refrigerator would be a direct loss. Direct loss — loss incurred due to direct damage to property, as opposed to time element or other indirect losses.
For Example, A Fire Within The Wall Structure Of A House Causes The Drapes.
The policy may also cover loss of income or increase in expenses that results from the property damage (pd). This expense is attributable to the covered loss, but is not part of the covered loss itself. A proper definition of ‘direct loss’ is loss proximately caused by the peril insured against, and the term ‘proximate cause’ as applied in insurance cases….
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