What is known as consequential losses, such as having to stay in a hotel due to property damage?

Consequential losses refer to the financial impact that occurs as a result of property damage, rather than from the damage itself. This can include expenses incurred during the period when the property is unusable, such as the costs associated with staying in a hotel while repairs are made. These losses do not stem directly from the physical damage to the property but instead arise indirectly as a consequence of the initial incident.

In this context, indirect loss encompasses various types of additional expenses related to the disruption caused by the damage, helping to illustrate how property damage can lead to further financial implications for the policyholder. Thus, the classification of these losses as indirect is essential in both insurance coverage and risk assessment, ensuring that policyholders understand the types of financial consequences they may face in such situations.