What are "consequential losses" in terms of insurance claims?

Consequential losses refer to the financial impact that arises from the inability to use property following an insured event. This may include losses related to business interruption, rental income that is lost due to damage, or other financial consequences resulting from the temporary unavailability of the property. In essence, these losses are not merely about the direct damage to the property itself but rather the secondary effects or opportunity costs incurred due to that damage.

In this context, the value of loss resulting from the loss of use of property is a clear definition of what constitutes consequential losses. This type of loss takes into account the broader implications of the property damage, emphasizing that the impact goes beyond physical repair costs or initial property value declines. Understanding consequential losses is crucial for policyholders to effectively communicate their claims and for adjusters to assess the full scope of losses accurately.