What is an example of an indirect loss?

An example of an indirect loss is the loss of use of a vehicle after an accident. This type of loss is not a direct result of physical damage to the vehicle itself but instead arises from the inability to utilize the vehicle due to its damage from the accident. Indirect losses typically refer to secondary costs or losses that occur as a consequence of a direct loss; in this case, the inability to use the vehicle may lead to additional expenses, such as needing to rent a replacement vehicle or incurring extra transportation costs.

In contrast, the complete destruction of a property represents a direct loss, as it involves physical damage to the property itself. Financial loss due to a job loss is also considered an indirect loss when viewed in the context of property; however, it does not directly pertain to a specific asset like a vehicle. Direct damage to a building clearly indicates a primary physical loss to that structure, which is distinctly different from the concept of indirect loss.