Illinois Property and Casualty Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What are extra expenses in business insurance?

Routine operating costs

Expenses needed for profit generation

Costs incurred to mitigate effects of business suspension

Extra expenses in business insurance refer specifically to the costs incurred to mitigate the effects of business suspension due to unexpected events like natural disasters, fires, or other disruptions. These expenses help a business continue its operations or to minimize losses during the period of suspension. For example, if a company needs to rent temporary office space or pay for overtime to meet deadlines while recovering from a catastrophe, these costs would qualify as extra expenses.

This concept is essential because it highlights the support business insurance offers beyond just covering direct losses. It encompasses any additional costs that arise from the need to maintain operations or services, making it a critical aspect of a comprehensive business continuity strategy. Such coverage can be vital in helping a business recover and resume operations more quickly, thereby protecting long-term viability and profitability.

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Only fixed costs of the business

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