Consequential Loss

10 months ago

Insurance Glossary Team

1 minute

Plain English Definition: Consequential loss refers to indirect losses that occur as a result of a direct loss, such as lost profits due to a fire damaging a business.

What Consequential Loss really means for someone with an insurance policy

Consequential loss coverage helps cover losses that are not directly caused by an incident but result from it. Standard insurance policies may not include this, requiring an additional endorsement.

Consequential Loss Real World Examples

A manufacturing plant loses revenue due to halted production after a fire.
A retail store suffers profit loss due to delayed shipments following a flood.
A tech company faces customer contract cancellations after a data breach.