Financial Loss Insurance Products

Financial Loss, or pure economic loss, can be defined as:

• A loss or expense incurred by any person other than the insured
• A loss or expense incurred by any person other than the insured resulting from the sale of supply of products
• A loss or expense not related to a physical injury or damage to property

Some business activities can cause a severe financial impact to others which was not their fault.

If a third party makes a claim for a Financial Loss, they are accusing another company or business of an act of negligence or a breach of contract that has resulted in them making extra payments or are out of pocket due to incurring unnecessary expenses.

Financial Loss can only be declared if it has not involved a physical damage or injury to another party (this would be covered under a Commercial General Liability or Public Liability insurance policy).

• business transactions
• event organizers
• project managers
• commissioned/contracted works
• manufacturers

• damages legally liable to be paid in respect of a claim
• business interruption
• event cancellation
• breach of contract
• trade credit
• financial guarantees
• legal expenses

Typical exclusions in a Financial Loss insurance policy may include financial loss caused by physical injury or damage, illegal acts, and/or fraudulent activities.

• Commercial General Liability
• Transaction Liability
• Event Cancellation
• Professional Liability
• Directors and Officers Liability
• Umbrella/Excess
• Legal Expenses

The cost of covering a Financial Loss will either be included in the overall package or an amount calculated as extended cover taking into consideration the size of the company, the potential impact of a negligent act and any previous similar claims.