Consequential Loss or Damage

Consequential loss or damage — as opposed to direct loss or damage — is indirect loss or damage resulting from loss or damage caused by a covered peril; such as fire or windstorm. In the case of loss caused where windstorm is a covered peril; if a tree is blown down and cuts electricity used to power a freezer and the food in the freezer spoils; if the insurance policy extends coverage for consequential loss or damage then the food spoilage would be a covered loss. Business Interruption insurance; extends consequential loss or damage coverage for such items as extra expenses; rental value; profits and commissions; etc.

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