loss - Insurance Software development

What is the difference between Direct and Indirect loss in Insurance?

Author - Webner
5:24 am
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Direct Loss

In insurance, the direct loss is the damage inflicted by a disaster, accident, or another event, referred to as “perils” in insurance language.

For eg: loss to your building or contents due to fire, smoke, shock damage from an earthquake or wind damage from a hurricane, etc. If a tornado strikes and it takes the roof off the building, a direct loss would include damage to the structure, as well as to equipment and other items inside.

Indirect Loss

Indirect losses, (“consequential losses” in business insurance policies) are not inflicted by the peril itself […]

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