Is Your Business Properly Insured in Event of a Loss?

Running a business is stressful enough. Any kind of loss only adds to the problem. Your comprehensive insurance policy should include coverage for just such an occasion. This is called Business Income with Extra Expense coverage. Is Your Business Properly Insured in Event of a Loss?

The Business Income portion of coverage will provide the amount of income you would have made had you not had a loss. The Extra Expense portion of coverage will provide a limit of insurance for new expenses due to the loss.

A typical policy says that the amount of Business Income loss will be determined based on the net income of the business before the direct physical loss or damage occurred; the likely net income of the business if no loss or damage occurred; the operating expenses necessary to resume operations with the same quality of service that existed before the loss or damage; and other relevant sources of information.

A typical policy says that the amount of Extra Expense will be determined based on all expenses that exceed the normal operating expenses that would have been incurred by operations during the period of restoration if no direct physical loss or damage had occurred (deductions will be made for the salvage value that remains on any property bought for temporary use during the period of restoration, once operations are resumed, and any extra expense that is paid for by other insurance, except for insurance that is written subject to the same plan, terms, conditions and provisions as this insurance); and all necessary expenses that reduce the Business Income loss that otherwise would have been incurred.

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