State Farm Insurance License Practice Exam

What additional expense coverage is available with the Business Income Policy?

1. Property repair costs

2. Loss of personal property

3. Extra expense coverage

4. Legal fee coverage

The correct answer is: Extra expense coverage

The Business Income Policy primarily covers the loss of income that a business suffers due to a covered loss that disrupts its operations. Alongside this primary coverage, there is an option for extra expense coverage, which is specifically intended to help businesses continue their operations while they recover from a loss. Extra expense coverage applies to the additional costs that a business incurs to avoid or minimize the suspension of its operations after an incident. This can include expenses like renting temporary space, getting equipment or supplies, or other necessary actions to keep the business running as smoothly as possible during recovery. By offering this additional financial support, the extra expense coverage ensures that businesses can maintain their operations and find ways to minimize the impact of a loss on their revenue and long-term viability. This makes it a critical component for many businesses concerned about potential disruptions and the associated financial losses.