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Liability insurance

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Liability consequential loss insurance

Liability consequential loss insurance protects against financial losses following business interruption that’s happened as a result of a liability insurance claim.

This cover is usually offered as an extension to public, statutory and employers’ liability insurance policies.

What is a consequential loss?

A consequential loss is an indirect loss due to an inability to use business property or equipment because of a natural disaster, legal proceedings or accident. It covers the revenue you would have earned, based on your financial records, had the disaster not occurred. 

Property or fire insurance policies will not compensate the owner for loss of income and indirect losses due to their inability to use their property or equipment.

Examples of consequential loss include: continued payment of salaries; fixed operational expenses, and other ongoing financial obligations.

What liability consequential loss covers

Liability consequential loss covers loss from interruption or interference with your business following:

Cover is generally for up to 12 months from the time of interruption or interference.

Liability consequential loss is sold as part of our business liability insurance solutions.

Talk to one of our brokers about a liability package that meets the needs of your business.


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Claim example

A business was caught selling alcohol to minors in breach of the Sale and Supply of Alcohol Act 2012. Legal action was taken against the business owner. The statutory liability policy covered the owner’s defence costs and the fine imposed. As part of the penalty imposed the business was also required to refrain from selling alcohol for a defined period and as a result the business suffered a loss. The amount of this loss was covered by this consequential loss section of the policy.