What is described as the physical loss of property?

The concept of a direct loss refers specifically to the physical damage or destruction of property itself. This could encompass scenarios such as a house caught in a fire, a piece of equipment damaged by water, or a car involved in a collision. In each instance, the loss is straightforward: the property has been physically harmed or rendered unusable.

Understanding this term is crucial as it distinguishes direct loss from other types of losses, such as indirect loss, which pertains to financial impacts arising from the direct loss, like loss of rental income while a property is being repaired. By focusing on the "physical loss," direct loss captures the immediate, tangible effects of an incident on the property in question.