What is meant by the term "indirect loss" in the context of Commercial Crime Coverage?

The term "indirect loss" in the context of Commercial Crime Coverage refers specifically to the economic impacts that occur as a consequence of direct loss events, such as theft. When theft happens, it can lead to a scenario where income that would have otherwise been generated is lost. For instance, if a business suffers a theft, it may temporarily close or operate at reduced capacity, which directly affects its ability to earn revenue during that period.

This connection highlights how indirect losses can manifest in a business through income that is not earned due to the disruptive effects of theft, even if the stolen property itself has not been directly tied to cash flow or immediate earnings. The focus here is on the economic ramifications related to the theft event rather than the theft itself or the property lost.

While options discussing the decrease in market value or costs associated with retrieving stolen property are relevant to the broader discussion of losses, they do not capture the essence of indirect losses, which fundamentally tie back to lost income opportunities following a theft. Thus, identifying indirect loss through the lens of lost potential income due to theft provides a clearer understanding of how such losses impact overall business operations and financial health.