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Business Income Coverage |
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Business Income is the net profit or loss
that would have been earned or incurred if
the suspension of the business had not occurred,
plus any normal operating expenses that must
continue during the suspension of the business.
Business Income insurance pays the actual
loss of business income sustained by the insured
because of a necessary suspension of the insured's
operation during the period of restoration
following a loss. The suspension must result
from direct physical loss or damage to real
or personal property. Coverage is provided
against the same causes of loss covered under
the insured's property policy. Under certain
conditions, the policy also provides an extension
of coverage for newly acquired property.
The insured's operations are the business
activities of the insured, which occur at
the location listed in the policy. The period
of restoration is the period beginning on
the date of the direct loss, and ending when
the damaged or destroyed property could have
been restored.
Extra Expenses
Extra Expenses are any expenses over and above those that would have been incurred during normal operation of the business. Some of the covered extra expenses are, expenses incurred to avoid or minimize the suspension of operations, expense to repair or replace property, and expense paid for overtime work to speed up the restoration of the business.
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