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DEFINITION OF CONSEQUENTIAL LOSS OR DAMAGE
Consequential loss or damage -- as opposed to direct loss or damage -- is
indirect loss or damage resulting from loss or damage caused
by a covered peril, such as fire or windstorm. In the case of loss caused where
windstorm is a covered peril, if a tree is blown down and cuts electricity used
to power a freezer and the food in the freezer spoils, iIf the insurance policy
extends coverage for consequential loss or damage then the food spoilage would
be a covered loss. Business Interruption insurance, extends consequential loss
or damage coverage for such items as extra expenses, rental value, profits and
commissions, etc.
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