What does Extra Expense Insurance cover?

Extra Expense Insurance is designed to cover the necessary extra costs that a business incurs in order to continue operations after a loss, such as damage to property due to fire or other insured disasters. This type of insurance is critical for businesses that want to minimize disruption and maintain their operations while they recover from a loss.

The coverage focuses specifically on expenses that go beyond regular operational costs, which might include things like renting temporary space, leasing new equipment, or employing additional staff to meet customer demand that continues despite the disruption. This will help a business to maintain its market position and customer goodwill while repairs or rebuilds are in progress.

While options related to normal operational expenses, temporary relocation, or legal fees might seem relevant, they do not capture the full scope of what Extra Expense Insurance is intended to cover. Normal operational expenses would typically be covered by standard business insurance, and legal fees are usually addressed under liability policies. Temporary relocation can be a component of the extra expenses, but it is not the sole focus. Hence, the most accurate understanding of Extra Expense Insurance is that it encompasses the necessary extra expenses required to keep the business functioning in times of loss.