Did you know that some studies estimate more than 25% of businesses fail to reopen after suffering a major loss?


Lack of Business Income, sometimes referred to as Business Interruption, Insurance. Think of it this way, as an investor, would you risk putting all of your eggs in one basket?

If not, why would risk your business by assuming that your operations could continue as normal after a loss? If you think it makes sense to diversify your investment portfolio to minimize your market risk, then perhaps you’ll see the benefit of Business Income and Extra Expense coverage in minimizing the risk that your business fails to reopen after a loss.

There are two standard policy forms available to provide a business income protection in the event of a loss:

  1. Business Income and Extra Expense Coverage
  2. Extra Expense Coverage

These two forms are very similar, and ultimately, they’re both designed to help a business minimize its loss of income after a claim. For the purposes of this article, we’re going to focus strictly on the Extra Expense coverage, whether you include this coverage in addition to your Business Income coverage, or purchase this coverage separately.

Extra Expenses

Think of Extra Expenses as an additional pot of money provided to you by your insurance carrier with one primary objective: to minimize the amount of time your business is shut down. Why would they do this?

The quicker your business is back up and running at full capacity, the quicker your income will be restored which ultimately reduces your Business Income loss. Examples of Extra Expenses that you could incur following a loss include:

  • Additional costs necessary to speed up repairs to your property
  • The cost to relocate your operations temporarily, or permanently
  • Increased operating costs related to a new temporary location
  • Expenses necessary to speed up the replacement of machinery, equipment or other property

Extra Expense coverage may not be essential for all businesses, but any business that can’t afford to be shut down for any length of time should give this coverage option serious consideration.

If you’d like to learn more, contact one of our Licensed Advisors or complete the form above. We’re here to help.

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