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Insurance terminology explained in simple terms

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Consequential Losses

Consequential losses are damages that arise as a result of other damages. In the context of indemnity insurance, this means: financial losses resulting directly from insured personal injuries or property damage are also insured. However, the consequential loss must be properly connected to the damage event. 

Example: A freelancer damages his client’s computer. This means that he cannot complete an order on time and loses € 2.000 in lost sales. He holds the freelancer liable for this amount. 

Consequential financial losses are insured under any conventional indemnity insurance policy. However, these losses only account for a fraction of the damages suffered by freelancers in everyday working life. Pure financial losses pose a much greater risk.

Term: Consequential Losses

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