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Consequential Loss

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Consequential Loss

This policy covers the amount of loss incurred as a result of being unable to use business property or equipment. If the property/equipment is damaged through a natural disaster or accident, only certain types

of insurance can cover the owner for the lost business income.

Consequential Loss is considered an indirect loss (as compared to losses from the direct damage). Direct damages would be covered under different types of insurance such as property/causal or fire insurance, but the firm still incurs the cost of lost operations. Consequential losses are not covered by ordinary insurance policies, unless specifically included on payment of additional premium.