Business owners cannot predict the future. Fires and storms can suddenly pose dangers and destroy physical structures and equipment. Typically, commercial property insurance pays for physical damages. However, sometimes businesses must interrupt operations for repairs to be carried out. In these cases, extra expense coverage can pay for lost revenue until the doors are opened again.
How Extra Expense Coverage Helps
There are multiple ways extra expense coverage is a valuable asset for companies. They include:
- Repairing or replacing damaged property in the event that such repairs reduce payable damages – For example, a storm destroys one wall of a store. If repairs are estimated to take three months, the store owner may decide to pay the contractor extra to have repairs finished in less time. If this extra expense reduces the estimated loss if the store had to be closed for three months, that expense will probably be covered.
- Avoiding or lessening company shutdowns to keep the business functioning – Extra expenses insurance can pay for expenses incurred to move to a temporary business location.
- Lessening the financial damage of a shutdown – If business stoppage is inevitable, this specific type of coverage can pay for costs business owners might not normally incur in order to resume operations.
Extra expense coverage can help ensure that even if company property is destroyed, business profits need not be.