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Additional Living Expense: the costs of living in a temporary location if a covered loss renders the space unliveable. This may include hotel costs, rent, and other increased costs of living incurred while the home is being repaired or rebuilt. These are often subject to both temporal and financial limitations.
Business Interruption: this is to poise an insured business in the position it would have attained had the loss that caused the interruption not occurred. It should provide funds necessary to sustain the insured business while its operations are suspended as a result of damage caused by a covered peril. It typically pays a business’s profit and continuing operating expenses, including payroll, for a specific amount of time.
Civil Authority: a type of coverage that provides business income benefits when a civil authority prohibits access to the insured property due to direct physical loss or damage to other property. It is most commonly triggered during mandatory evacuations.
Contingent Business Interruption: usually an extension of the business interruption coverage available in most commercial property policies. This provides the insured with benefits to cover lost profits and extra expenses resulting from damage to a third party’s property, typically in four situations: (1) when the insured business relies on a third party to deliver materials or product; (2) when the insured business depends upon a third party to manufacture products; 3) when the insured business depends on a third party to purchase its products; and 4) when the insured business depends on a third party leader location to attract customers.
Extended Period of Indemnity: provides business interruption and extra expense benefits beyond the period of restoration defined in the standard business interruption policy.
Extra Expense: covers expenses incurred in reducing the business loss, or increased costs in continuing a business after a catastrophic event. It may reimburse a policyholder for money spent moving a covered business to a different location while the covered property is restored. It is intended to offset expenses associated with returning to normal operations. Equipment breakdown coverage is often available with this coverage and ideally is purchased if a customer’s business is dependent upon certain equipment.
Loss of Rents: pays for lost income when a covered rental property is rendered uninhabitable by a covered event and renters need not make rental payments.
Ordinance or Law: provides coverage in the event that building codes, enacted after a structure was built, require additional changes not original to the structure at the time of loss. Typically, those who purchase replacement cost coverage may expect that upgrades required by law are included in the coverage purchased, but it is possible that some policies exclude these increased costs of repair.
Ordinary Payroll Coverage: provides for salaries as a continued expense, and a policy may provide coverage for a business to pay hourly employees for a specified period of time while the business is closed.
Property Damage: including the building structure itself, fixtures, machines, furnishings, raw materials, and inventory.
Utility Services – Time Element: extends business income and extra expense insurance to protect against losses caused by interruption of services from a specified utility that provides a business with water, power, or communications.