Which term describes an outcome not directly caused by a covered peril, but occurring as a consequence?

Which term describes an outcome not directly caused by a covered peril, but occurring as a consequence?

• A. Indirect Loss
• B. Occurrence
• C. Accident
• D. Proximate Cause

Answer: (A)

Indirect loss is a consequence that arises from a direct loss caused by a covered peril, not the peril itself. For example, when a fire damages the building (a direct loss), the resulting business interruption, lost income, and extra expenses are indirect losses—the outcomes that flow from the direct loss. The other terms describe events or initiating causes rather than the resulting consequences: an occurrence is the event that causes damage, an accident is an unintended event, and proximate cause is the primary cause that starts the chain of events. So the term that fits “an outcome not directly caused by a covered peril, but occurring as a consequence” is indirect loss.

Indirect loss is a consequence that arises from a direct loss caused by a covered peril, not the peril itself. For example, when a fire damages the building (a direct loss), the resulting business interruption, lost income, and extra expenses are indirect losses—the outcomes that flow from the direct loss. The other terms describe events or initiating causes rather than the resulting consequences: an occurrence is the event that causes damage, an accident is an unintended event, and proximate cause is the primary cause that starts the chain of events. So the term that fits “an outcome not directly caused by a covered peril, but occurring as a consequence” is indirect loss.