BusinessIncomeAndExtraExpense. Sometimes we spit out the words so fast, it all sounds like one thing, similar to HiredAndNonOwnedAuto. But in fact, they are separate coverages. Most agents that have a license know that BI can be purchased without EE, but some do not know that EE can also be purchased without BI.
As a reminder, EE covers reasonable and necessary costs that a business incurs as a result of disruption to its operations. It can provide cash to help a business stay afloat while property is being repaired or replaced. It is a win-win for the policyholder and the carrier, since the business recovers quicker, and this reduces the loss for the insurance company.
Some examples of special expenses that EE would cover:
Relocating to a new or temporary location.
Modifications / alterations to new / temporary location.
Additional Payroll in the form of overtime for employees or new temporary employees.
Most insurers provide an Extra Expense Coverage Form (without BI). ISO uses CP 00 50. Who could use EE, but does not need BI? There are several broad categories.
- Consultants of many kinds. They do not necessarily meet with clients at the consultant’s office, and even if they do, arrangements can easily be made to meet clients at another location, especially in the current era of office sharing. Consultants rarely depend on walk-in business. So the consultant does not lose income or need BI, but could need Extra Expense for another location.
- Financial Professionals, such as real estate agents, insurance agents, attorneys. Again, they do not necessarily meet at their business premises, but if they do, clients are easily directed to another location. Business Income is not lost, but the EE is needed.
- IT Professionals usually go to their clients premises, rather than meeting at their own offices. Once again, a disruption in operations may not cause a business income loss, but can result in extra expenses.
- Human Resource and Compliance Professionals
- Printing and Publishing
- Nonprofits and Community Organizations
This is not a short list. It is often assumed that all businesses need BI and EE, but some businesses just need Extra Expense.
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