After a covered fire, a print shop rents temporary space for $12,000 a month for three months and rents replacement presses for $9,000 so it can keep filling orders. What is its extra expense claim?
Explanation
Extra expense pays the necessary costs the insured would not have incurred had there been no loss, spent to avoid or cut short the suspension of operations. Both items qualify: three months at $12,000 is $36,000, plus $9,000 for the rented presses, for a total of $45,000. The $36,000 answer leaves out the equipment rental. Extra expense sits alongside business income, which pays lost net income and continuing expenses rather than these added costs.
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