Why Your Business Needs Extra Expense Coverage

Extra expense coverage can help keep you open for business.

If your business is like most, you can’t afford a shutdown. Fire, windstorms and other perils might cause physical damage to your location, but what about the potential loss of customers?

Extra expense coverage is designed to meet the needs of businesses that can’t afford to be closed for an extended period. Extra expense covers costs incurred to minimize disruption to a business and reduce the potential for lost customers.

When this coverage is triggered, extra expenses might include:

• Moving expenses to a temporary location for continued operations
• Rent, heat, power and communication at temporary locations, along with any necessary alterations to the facility
• Office equipment, such as computers and copiers
• Special advertising expenses to announce you’re still open for business

The classic example of a business needing extra expense coverage is a dry cleaning operation. A dry cleaner that suffers a covered property loss can’t afford to lose customers to a competitor even temporarily. Extra expense could cover the opening of a temporary location to reduce the chance that customers might get used to taking their dry cleaning elsewhere.

Some businesses can’t set up shop easily in a temporary location, so extra expense coverage could also pay for the additional cost to subcontract manufacturing or processing by others while your property is being restored after a covered loss.

Ask your independent insurance agent about extra expense coverage to help you continue operations and retain customers until the grand reopening of your restored location.

This loss control information is advisory only. The author assumes no responsibility for management or control of loss control activities. Not all exposures are identified in this article. Contact your local, independent insurance agent for coverage advice and policy service.