Maximum Foreseeable Loss
What Does Maximum Foreseeable Loss Mean?
Maximum Foreseeable Loss (MFL) refers to the greatest possible loss that an insured individual can incur. This occurs when the highest payout from insurance is needed, such as in the event of property destruction and disruption of business operations. Additionally, this type of loss typically implies that the recovery process will be prolonged.
Insuranceopedia Explains Maximum Foreseeable Loss
Maximum Foreseeable Loss (MFL) represents the worst possible outcome for a policyholder. For example, if a business owner’s commercial building is destroyed in a fire, it results in both property damage and loss of income. As a result, the claim typically includes not only compensation for property repair or reconstruction but also for the lost income. Before processing the claim, an investigation is conducted to assess the value of the loss and ensure that there was no negligence on the part of the insured that contributed to the damage.
