To what extent are extra expenses covered under the ISO Business Income Coverage (without Extra Expense) Form?

To what extent are extra expenses covered under the ISO Business Income Coverage (without Extra Expense) Form?

• A. Only to extent they actually reduce the business income loss
• B. Not covered at all
• C. Covered up to the policy limit
• D. Covered for up to 60 days

Answer: (A)

In a Business Income Coverage form without Extra Expense, you’re insured for the loss of net income and for continuing normal expenses caused by a covered loss, but there isn’t a separate, broad extra expense benefit. Extra expenses are only covered to the extent that incurring them actually reduces the amount of the business income loss. If an additional expense helps lessen the BI loss, that expense is reimbursed to the extent it reduces the loss (up to the policy limit and within the policy terms). If the extra expense doesn’t reduce the loss, it isn’t covered. So the correct idea is that extra expenses are covered only to the extent they reduce the business income loss.

In a Business Income Coverage form without Extra Expense, you’re insured for the loss of net income and for continuing normal expenses caused by a covered loss, but there isn’t a separate, broad extra expense benefit. Extra expenses are only covered to the extent that incurring them actually reduces the amount of the business income loss. If an additional expense helps lessen the BI loss, that expense is reimbursed to the extent it reduces the loss (up to the policy limit and within the policy terms). If the extra expense doesn’t reduce the loss, it isn’t covered.

So the correct idea is that extra expenses are covered only to the extent they reduce the business income loss.