Which example illustrates an indirect loss resulting from a direct loss?

An indirect loss refers to a secondary consequence that stems from a primary, or direct, loss. In this context, the destruction of property, such as a building or facility, leads to an indirect loss in the form of lost income stemming from the inability to operate effectively due to that property damage.

When a business suffers direct damage to its premises, it may face operational interruptions that hinder its ability to conduct normal activities, thereby reducing its revenue. This scenario epitomizes how a direct loss—like damage to physical property—can lead to further financial repercussions, making the loss of income a clear example of an indirect loss resulting from that initial direct loss.

In contrast, physical damage to a delivery vehicle and damage to the structural integrity of a building are examples of direct losses, as they involve tangible property damage without directly correlating to the financial ramifications that may follow. Costs incurred for immediate repairs could also be seen as a direct cost associated with the initial loss, rather than a loss influenced by it.