Which term refers to the consequence resulting from a physical loss?

The term that refers to the consequence resulting from a physical loss is "indirect loss." Indirect losses are secondary losses that occur as a result of a primary loss. For example, if a business suffers physical damage to its property due to a fire, the immediate cost of repairing or replacing the damaged property constitutes a direct loss. However, if the business is forced to close during repairs, leading to lost income or increased expenses, that lost income is categorized as an indirect loss.

Understanding the distinction between direct and indirect losses is crucial in property insurance, as it helps in determining the total impact of a loss event on an insured party. Insurers assess both types of losses when evaluating claims to provide appropriate compensation. Knowing this terminology and the context in which it is used is essential for effective communication in property insurance matters.