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Extra Expense Coverage for Offices
Imagine your professional office has suffered a significant property damage loss, perhaps from a fire due to faulty electrical wiring, or water damage to your unit, equipment and computers because of a burst pipe. Now what? Well, your property insurance will likely take care of the cleanup and costs to replace damaged equipment, and your business continuity and disaster recovery plan will be invaluable in helping to identify all the critical elements of your business operation that need to be recovered. Your plan will also ensure you have backups in place to retrieve your business data and that you have identified your key suppliers and key IT infrastructure components.
But while all that is happening, you still have customers to serve so you need to ensure you have a plan and the right insurance protection in place to help you get back in business as soon as possible. Whether you operate a law office, real estate firm, dental practice, or any number of professional office operations, continuity of operations is critical to maintaining your customer base.
How do you get back up and running as quickly as possible?
This is where Extra Expense coverage comes in. These are just a few examples of how this coverage can help you:
- Rent temporary office space to see clients while your usual premises is under repair.
- Rent temporary office equipment to continue serving your customers.
- Hire part-time or additional workers to maintain business operations.
- Advertise your temporary new location to your clients.
Essentially, any necessary extra expenditure that is required to keep your business going at the same level as prior to the loss qualifies as an expense where this coverage could apply.
However, Extra Expense coverage has limitations. It does not cover income loss during the business shutdown; Business Interruption insurance addresses lost profits instead. Additionally, Extra Expense coverage does not cover repair or replacement costs for damaged property, as Property insurance handles these expenses.
How long does Extra Expense coverage continue to pay?
Extra Expense coverage helps with necessary expenses during the restoration period. These are costs the business would not have incurred if there had been no physical damage to the insured property.
What limit of coverage should I purchase?
Estimate how long your business might be closed at its current location and the temporary additional costs needed to maintain normal operations. This includes expenses for renting temporary premises, hiring extra staff, renting new equipment, and any other elements required to continue operations. This process can be complex, but your insurance broker can assist. They will review your business continuity plan, identify and quantify risks, and use their experience and market knowledge to tailor coverage solutions to fit your business needs. Find a broker and learn about how Unica can protect your business.
