ISO’s form CP 0030, Business Income (and Extra Expense) talks about both Extended Business Income and Extended Period of Indemnity. The confusing names are for coverages that are similar, but there is a difference.

To understand these two coverages, first take a look at the period of restoration. The form defines it as beginning 72 hours after the loss for BI. This can be changed by endorsement. It also begins immediately (no delay time) after the loss for Extra Expense.

The ending of the restoration period is defined as the earliest of:

1. When the property at the described premises should be repaired, rebuilt or replaced with reasonable speed and similar quality; or
2. The date when business is resumed at a new location.

It is easy to imagine a loss where the building and BPP have been restored, but the revenues have not returned to pre-loss levels. Customers do not yet realize the business has re-opened; customers have not yet found the new location; contracts have been delayed or cancelled; etc. According to the form, the Business Income period has ended, but the insured is still incurring a loss due to lower revenue.

CP 0030 includes an automatic additional coverage, granting up to 60 days to cover BI during this lag time, if needed. This coverage is Extended Business Income. The policy does not need an endorsement, additional 60 days is already available.

But what if 60 days is not enough? That is when Extended Period of Indemnity is relevant. It is an optional coverage, requiring endorsement and a change to the declarations. During the lag time that property has been restored but income has not returned to pre-loss level, Extended Business Income increases the number of days of coverage. Instead of the automatic 60 days, the insured chooses the number of days. The ISO manual allows up to 2 years of coverage, but each carrier will choose their own option.