Question

Jenna opened a successful restaurant. One night, after the restaurant had closed, a fire started when the electrical system malfunctioned. In addition to the physical damage to the restaurant, Jenna also lost profits that could have been earned while the restaurant was closed for repairs. The lost profits are an example of

Answer 1

Indirect loss

Step-by-step explanation:

The lost profits are an example of indirect loss.

Indirect loss also known as consequential loss is a loss sustained by a business owner when it is unable to use its assets for the intended purpose. Indirect loss is as a result of damage caused by fire, flood, earthquake etc.

An insured business is able to recover part of indirect loss but if the business is not insured, then it will bear the consequences alone.