People confuse these all the time or they think they are the same thing. They are actually two different coverages that serve two separate purposes.

Business income are monies paid to you for the ALS or actual loss sustained during the loss that happened in a 12 month period. This replaces your net income or net profit before taxes that you would have earned or incurred. Thirdly monies needed to maintain normal operating expenses, such as payroll for up to 60 days. This last coverage can be modified depending on your needs and time frame. The time frame the policy will cover you is called the period of restoration. This time frame of coverage occurs within 12 months after the date of the physical damage or loss occurred.

Extra Expense is used to avoid or minimize the shut down and continue operations. It is used to repair or replace property to reduce the extent of business income loss. It will pay the period of restoration or 12 months depending on the verbage of your policy.

Make sure if you own a restaurant in the Bay Area that your policy has both of these coverages. Having Business Income or Extra Expense independently can leave you wide open to large financial gaps in your coverage at the time of a loss. Make sure as a restaurant or bar owner you have both of these coverages or financial hardship can happen to you.

If you have any questions, please send me an email.

Author Stratton

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