What are consequential damages in general liability and excess policies?

Full question:

I am a Corporate Sales Executive with Brown & Brown and my client is wanting information regarding consequential damages on their General Liability and Excess policies.

  • Category: Damages
  • Date:
  • State: Louisiana

Answer:

Consequential damages refer to losses that do not occur directly from an act but arise from the consequences of that act. For instance, lost profits are a type of consequential damage. In breach of contract cases, these damages can be recovered if they were foreseeable to both parties at the time of the contract. While it may be challenging to determine the exact amount of damages, they must not be speculative. In contractual situations, consequential damages from a seller's breach can include any losses that were known to the seller at the time of the contract and that could not be reasonably avoided by finding a substitute or taking other measures.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Yes, consequential damages can be available for breach of contract if they were foreseeable to both parties at the time the contract was made. These damages must arise from the consequences of the breach and not from the breach itself. For example, if a seller knew that a delay would cause the buyer to lose profits, those lost profits may be recoverable.