Which of the following is an example of direct loss

Direct Loss Example Fire and smoke damage would count as a direct loss. So would theft, or a car crashing through the front window.

What is a direct loss?

Direct Loss — loss 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.

Which of the following is an example of an indirect loss?

An indirect loss happens as a result of a direct loss. For example, a restaurant is damaged by a fire (direct loss), and then the restaurant loses income, because it cannot serve food.

What is the difference between a direct loss and an indirect loss?

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 are the 2 types of losses in insurance?

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.