Which of the following would trigger coverage under business income form with extra expense coverage?-Carpet cleaning after a water main break-Employee pay after a building structure is damaged-Building inspectors fees after a loss-Unit rent when tenant is liable
Carpet Cleaning after a water main break
The correct answer is:
Carpet cleaning after a water main break.
Business Income insurance provides coverage for loss of income that a business may suffer as a result of a covered loss (such as fire, storm, theft, etc.) that interrupts the normal operations of the business. Extra Expense coverage is also included in this type of policy and covers extra expenses incurred by the business in order to continue its operations during the period of interruption.
In this case, the loss is the water main break, which is a covered loss. The interruption to the normal operations of the business is the need for carpet cleaning. The cost of carpet cleaning would qualify as an extra expense incurred by the business in order to continue its operations during the period of interruption. Therefore, coverage under business income form with extra expense coverage would be triggered by carpet cleaning after a water main break.
Employee pay after a building structure is damaged, building inspector’s fees after a loss, and unit rent when tenant is liable are not covered under this policy because they do not represent additional expenses incurred to keep the business running during an interruption.
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