What is the primary purpose of Extra Expense coverage in a Business Owner's Policy?

The primary purpose of Extra Expense coverage in a Business Owner's Policy is to cover the cost of keeping the business operational after a loss. This type of coverage is specifically designed to help businesses continue their operations despite experiencing a covered loss, such as a fire or natural disaster. The expenses can include things like renting temporary office space, providing additional salaries, or even the costs associated with overtime work for employees in order to maintain business continuity.

This coverage is critical because it enables a business to mitigate the financial impact of disruptions and not only helps with immediate operational needs but also safeguards against potential long-term losses in revenue that could arise from prolonged downtime. The intent is to help a business get back on its feet as quickly as possible so that it can resume normal operations even in the face of setbacks.