How is physical harm to tangible property, including loss of rent or hotel bills, categorized?

Physical harm to tangible property is categorized as a direct loss because it involves actual physical damage to that property. In the context of insurance, direct loss refers to losses that arise directly from a peril, such as fire, theft, or windstorm, affecting the integrity of a physical asset. This includes the costs associated with repairing or replacing the damaged property as well as any subsequent monetary losses, such as loss of rent or hotel bills that may occur due to the property being unusable.

Direct losses contrast with other loss categories that consider the financial implications of a loss rather than the immediate damage to property itself. For instance, indirect loss typically refers to consequences that stem from the direct loss, such as lost profits or additional expenses incurred as a result, rather than the damage to the property itself. Temporary loss would suggest a situation where the property can be restored or fixed in a short period, while permanent loss implies that the property has been irrevocably damaged or destroyed. In either of those cases, the straightforward physical harm and its immediate financial consequences categorize it as a direct loss.