In the context of product liability insurance, what is meant by 'pure financial loss'?

The correct choice is the definition of 'pure financial loss,' which refers to financial loss that occurs without any accompanying bodily injury or damage to third-party property. In the realm of product liability insurance, this type of loss is significant because it can arise from scenarios where a defective product has caused economic harm to a business or individual, but there has been no physical injury or damage to property.

Pure financial loss is distinct from other types of losses because it does not involve tangible harm, which can complicate liability issues and the judgments surrounding such claims. For example, if a product fails, leading to a business losing revenue without affecting anyone's health or damaging property, the incurred losses are considered pure financial losses.

By understanding this concept, it becomes clear why it is crucial in assessing risk and liability within product liability insurance, as insurers have to evaluate the implications of such losses on their coverage and claims processing.