Extra Expense Coverage
Definition:
Insurance that pays for additional costs incurred to minimize business disruption after a covered loss.
Explanation:
This coverage is primarily used in commercial policies. It pays for expenses like renting temporary equipment or relocating operations.
Example:
If a restaurant’s kitchen is destroyed by fire, extra expense coverage may pay for renting another facility to keep the business running.
Why it matters:
This term affects how claims are handled and what payout a homeowner may receive.