Which type of damage arises as a consequence of direct losses and is typically not covered by property insurance?

Indirect damage arises as a consequence of direct losses and usually falls outside the coverage provided by standard property insurance policies. This type of damage includes loss of income or additional living expenses resulting from the inability to use a damaged property. For instance, if a fire damages a business location, the direct damage pertains to the physical destruction of the property; however, the loss of revenue due to business interruption is considered indirect damage.

Property insurance is primarily designed to cover direct damage to the property itself rather than the subsequent financial impacts that arise from it, which is a key characteristic distinguishing indirect damage from direct damage. Understanding this distinction is crucial for assessing insurance needs and expectations when there is a risk of property loss or damage. Other forms of damage, such as negligence or accidental damage, do not specifically encapsulate the nature of losses that arise as indirect consequences of direct losses.