Maximum Foreseeable Loss

Updated: 29 February 2024

What Does Maximum Foreseeable Loss Mean?

Maximum foreseeable loss (MFL) is the highest loss that can possibly happen to an insured. This means that he or she needs the highest possible payout from insurance, such as when property is destroyed and business operations disrupted along with it. This loss also means that recovery will most likely be a long process.

Insuranceopedia Explains Maximum Foreseeable Loss

The worst that can possibly happen to a policyholder constitutes maximum foreseeable loss. An example is that of a business owner whose commercial building is destroyed in a fire. Not only does this mean damage to property, but it causes loss of income as well. Thus, the claim includes not just repair or reconstruction for the property, but probably compensation for lost income. Before honoring the claim, an investigation is initiated not just to assess the value of the loss, but also to ascertain that there is no negligence on the part of the insured that contributed to the loss or damage.

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