Business Income and Extra Expense Checklist

The loss of income and the additional expenses that occur after a direct loss to property can be devastating to a business. All aspects of the insured’s property and operations must be considered when addressing such potential loss exposures because properly structured consequential loss insurance will be needed to ensure that the business survives. Theoretically, business income, if properly purchased, will do exactly what the business would have done had no loss occurred—no more, no less. But what happens after the property is restored? Can the business regain its customers and survive? In addition to surveying the insured’s property and operations, key suppliers, customers, and inter-related companies should also be considered in the evaluation. In doing so, the insured should try to determine the extent of the most severe damage possible to the most critical items at the worst time of year. Extensive discussion of the information in this checklist can be found in the Business Income section of FC&S. For example, see Business Income Information: Introductory History and Development. Also, see Business Income and Extra Expense Endorsements.