What does "indirect loss" typically include?

Indirect loss typically refers to losses that are not directly caused by a specific event but are a consequence of the initial loss. In the context of insurance, this would encompass losses that arise as a secondary effect of damage to property, such as loss of income resulting from the inability to utilize that property.

For instance, if a business suffers property damage due to a fire, the direct loss would be the cost to repair or replace the damaged property. However, while the repairs are being made, the business may experience a decline in income due to halted operations. This lost income is categorized as an indirect loss because it is not a result of physical damage to the property itself but rather a consequence of that damage.

The other options touch on aspects of loss or penalties that do not fall under the definition of indirect loss. Physical damage pertains to direct loss, immediate financial losses could imply direct impacts as well, and legal penalties typically result from non-compliance or violations unrelated to the physical loss or income interruptions.