Question

Identify the type of property covered under the Consequential Loss Assumption Clause:

a. Property damaged by an insured peril
b. Property indirectly affected by a covered loss
c. Property located within a specified area

Answer 1

The Consequential Loss Assumption Clause usually applies to property indirectly affected by a covered loss, such as a business experiencing a loss of income due to its supplier's damage by an insured peril.

Step-by-step explanation:

The type of property covered under the Consequential Loss Assumption Clause typically refers to b. Property indirectly affected by a covered loss. This means that while the property itself is not directly damaged by an insured peril, it does suffer a loss as a result of another property's direct damage. For example, if a business's main supplier suffers a fire and can no longer provide the necessary goods, the business may experience a loss of income due to inability to sell those goods. This indirect loss could be covered under a consequential loss assumption clause in a business interruption insurance policy.