Direct Loss
Definition of "Direct loss"
Property loss in which the insured peril is the proximate cause (an unbroken chain of events) of the damage or destruction. Most basic property insurance policies (such as the standard fire policy) insure against only direct loss and not indirect loss or consequential loss. For example, a fire within the wall structure of a house causes the drapes to catch fire, which in turn fans flames onto the furniture a direct loss. An indirect loss would be inconvenience of the inhabitants, who would not be able to sleep in their home, thus causing a drop in their efficiency at work.
Popular Insurance Terms
Insurance for accountants covering liability lawsuits arising from their professional activities. For example, an investor bases a buying decision on the balance sheet of a company's annual ...
Entitlement of a participant in an employee benefit insurance plan to receive benefits regardless of his or her employment status. ...
Loss that is not a direct result of a peril. 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 ...
Insurance facility composed of many different syndicates, each specializing in a particular risk; for example, hull risks. Lloyd's provides coverage for primary jumbo risks as well as ...
Individual or other entity who owns an insurance policy. Synonymous with policyowner. ...
Policy that pays a specified sum not related in any way to the extent of the loss. The term applies to a life insurance policy rather than to a contract of indemnity because the former does ...
U.S. government agency (formerly the Atomic Energy Commission) responsible for regulating the nuclear energy industry. The commission also provides supplemental insurance for nuclear ...
Health insurance coverage offered by some states for medical expenses and loss of income from nonoccupational disability. The merits of federal health insurance have been debated for some ...
Coverage for less than one year. Insurers generally charge higher rates for short-term policies than for longer term insurance, such as an annual policy, because of the need to recoup ...
Have a question or comment?
We're here to help.