What type of insurance policy typically does not cover indirect losses?

Property insurance typically primarily covers direct losses, which involve damage to the insured property itself due to specific perils, such as fire, theft, or natural disasters. Direct losses are straightforward, as they are associated with the physical damage to the property being insured.

Indirect losses, on the other hand, usually arise as a consequence of direct losses. They can involve situations such as loss of rental income or additional living expenses incurred while repairs are being made to the property. While some property insurance policies may include coverage for certain indirect losses, many standard property insurance forms do not cover these types of losses unless specifically endorsed.

Other types of insurance, like liability insurance or health insurance, are designed with different purposes and may address indirect losses in their own context. For instance, liability insurance can cover consequential damages arising from a policyholder's actions, while health insurance can cover ancillary costs related to medical treatments. Fidelity insurance is focused on protecting against losses due to fraudulent acts of employees, which also does not align with the typical coverage framework of indirect losses.

Understanding the difference between direct and indirect losses is critical when evaluating insurance policies to ensure adequate coverage for potential risks and losses.