Which one of the following losses is an indirect loss?
A)damage to a car when a tree falls on it
B)loss caused by an arsonist who burns down a building to collect insurance proceeds
C)monetary losses due to the inability to produce and sell goods when a machine is destroyed
D)monetary losses due to a legal liability claim

Question

Quizplus · Accepted Answer

An indirect loss is a consequence of direct physical damage to property or inventory that results in a disruption of the business or production process. Option A is an example of a direct physical loss, and options B and D are examples of a deliberate act or legal liability, respectively. Option C represents a financial loss due to the inability to produce and sell goods caused by the destruction of vital machinery or property, making it an example of an indirect loss.

Which One of the Following Losses Is an Indirect Loss