Extra Expense Insurance is a type of commercial coverage that will pay for the additional costs of the insured while they recover from a significant disruption. It can cover any non-ordinary expenses that a business may incur and provide you with money to help your business stay operational while your property is either replaced or repaired.
Business interruption insurance will provide coverage for normal business expenses in the event a company needed to close operations temporarily. This includes items such as loans, wages, and leased business property. Buying extra expense insurance will pay for expenses that are considered to be ‘above and beyond,’ any normal operational costs.
Extra expense insurance will activate following an event that is covered under a business property insurance policy. It starts on the day you suffer the event that causes the damage to your property.
If you are thinking about whether or not you should buy extra expense coverage for your business, there are a few key points to consider.
Essentially, if the services your business provides could be easily picked-up and resumed from a temporary location, this makes the concept of buying extra expense insurance a viable choice for your business.
What exactly does extra expense insurance cover?
Buying extra expense insurance will cover any expenses that are over and above any usual operational expenditure for your business. In order for the policy to become active, the expenses you incur must arise following physical damage to your property after a named peril on your commercial property insurance policy.
The expenses that are covered must be during a period of restoration, and which would not have arisen should the physical damage not have taken place, and for these below-mentioned reasons.
What is the period of restoration in excess expense insurance?
When you buy extra expense coverage, you will see the term ‘period of restoration’ mentioned. This term refers to the time it takes to replace or repair your damaged property. It starts on the date of your physical loss, and it ends when your damaged property is either rebuilt, replaced, or repaired. If you need to move to another location, then the period of restoration will end when you begin operating from the new premises.
How to buy extra expense insurance?
There are lots of ways you can buy extra expense coverage:
If you are looking to get quotes for extra expense insurance, then you should speak with a local commercial insurance expert in the first instance. They can offer advice on the most cost-effective solutions for all your commercial insurance needs, and help to answer any questions you might have.