What it does
CP 00 50 covers only Extra Expense. These are the necessary expenses incurred during the period of restoration that would not have been incurred without the direct physical loss at the described premises from a Covered Cause of Loss. Examples include moving to temporary premises, renting substitute equipment, and overtime to keep serving customers. It does not pay for lost net income.
Key provisions
- Recovery is limited by percentages of the limit shown in the Declarations that apply by length of the period of restoration. For example, the schedule may allow a fraction of the limit for up to 30 days, a larger fraction for up to 60 days, and the full limit beyond that.
- Civil authority, alterations and new buildings, and newly acquired locations apply in an Extra Expense-only form.
- There is no coinsurance.
Who needs it
Operations where clients, members or the public expect uninterrupted service and revenue would continue if the doors stayed open somewhere. Financial institutions, professional practices and service providers are typical.
Quoting and selling notes
- Build a cost estimate for a disaster recovery plan (temporary office, IT restoration, staff relocation) to size the limit, then choose the limit percentages that match how quickly the money would be spent.
- If income would also suffer, CP 00 30 is usually the better fit.
