One of the most significant risks to any business involving an expensive equipment investment is that a natural disaster or vandalism can damage machinery. Without the proper insurance, it could mean loss of income for a while. Many businesses rent equipment to avoid high upfront costs, but it's still wise to carry extra expense business insurance coverage, which pays for certain repairs.
Following a disaster, you may need to spend the extra money you would not have otherwise spent to keep your operation running. As part of a business or commercial property insurance, extra expense coverage can pay for repairs associated with disasters beyond your control, such as the vandalism of a fallen tree on your roof. It can also pay for tracking down the right replacement equipment for temporary use.
Extra expense coverage is business insurance that pays for items such as renting temporary office space while your main workplace undergoes repairs. It can also temporarily pay for renting equipment to replace equipment in the shop. Another benefit to this coverage is it can pay overtime to contractors working to accelerate repairs.
This coverage is helpful when disaster strikes and an operation must be temporarily shut down or moved to another location. Many businesses purchase extra expense coverage in combination with business interruption insurance, which pays for lost income due to a disruption.
As part of business insurance coverage, extra expense coverage comes in handy when a disruption forces you to take additional steps before returning to norms. You may need to pay extra for repairs to expedite the work, in which extra expense coverage provides reimbursement.
Extra expense coverage is an extension to add to an existing business insurance plan. To ensure you get the right extension that applies to your company, you should talk with an insurance expert who has built relationships with various insurance providers. A broker that deals with multiple insurers is in the best position to help you get the appropriate coverage at the best price.
The reason it's advantageous to work with experienced insurance agents who understand your industry is that coverage can be very complex. Business owners that don't take the time to learn the details of an insurance policy may set themselves up for later disappointment when they learn that not every disaster is automatically covered by a standard business policy.
You may have many questions about what type of extra expenses are already covered by your existing plan. Flooding is a type of disaster that falls in a gray area regarding insurance. If an unexpected pipe burst causes flooding, your policy covers the damage costs. But if the flooding turns out to be a result of your company's negligence, then it won't be covered.
Extra expense coverage begins with damage due to covered perils. Make sure you have a clear understanding of what these disasters are.
One of the keys to business success and resilience is to secure the right business insurance coverage. While a standard business insurance plan covers many mishaps, you will have complete coverage by choosing options that address your company’s risks. Contact our agents at Spotlight Insurance Agency for more information on crafting the ideal insurance plan for your enterprise.
