What type of loss follows as a consequence of a direct loss?

The correct choice is an indirect loss. When a direct loss occurs, it typically leads to a subsequent or consequential loss that is termed an indirect loss.

Direct loss refers to damage to property or the physical loss itself, such as the destruction of a building due to fire. This loss can often be quantified and is usually covered by property insurance. Indirect losses arise as a consequence of the direct loss. For example, if a business's property is damaged in a fire (a direct loss), the business may lose income because it can no longer operate, and it may incur additional expenses like temporary relocation (indirect losses).

Understanding the distinction between direct and indirect losses is crucial in property and casualty insurance. Insurers provide coverage for both direct and indirect losses, but the specific terms and coverage limits might differ, making it essential to be aware of these concepts when evaluating insurance policies.