What are the 2 types of losses in insurance?

What are the 2 types of losses in insurance?

Thus, insurers distinguish between two types of damage: primary or direct damage, such as destruction by fire, and indirect or consequential loss, such as a cessation of business due to the fire.

What are the types of fire insurance?

Fire Insurance Types Valued Policy. This is a fire insurance policy in which an agreement is framed and the insurer undertakes to pay in the event of destruction of property by fire. Specific Policy. …Average Policy. …Floating policy. …Excess Policy. …Blanket Policy. …Comprehensive Policy. …Consequential Loss Policy. More items…

What is an example of an indirect loss?

An indirect loss happens as a result of a direct loss. For example, a restaurant is damaged by a fire (direct loss), and then the restaurant loses income, because it cannot serve food.