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

Indirect losses are those that are a result of a direct loss. In this case, the direct loss is the destruction of the machine, while the indirect loss is the inability to produce and sell goods. Option A is a direct loss as the damage to the car is the direct result of the falling tree. Option B is an intentional act of fraud, and Option D is a direct loss due to a legal liability claim.

Which One of the Following Losses Is an Indirect Loss