SIMPLIFIED

BUSINESS INCOME

& EXTRA EXPENSE 

CALCULATOR

Calculate a 12-month exposure for business income and extra expense coverage.

Please do not include $, %, other symbols or commas in your answers

ABOUT BUSINESS INCOME INSURANCE

Business Income, in general, pays for net income (or loss) plus continuing normal operating expenses including payroll in the event of loss resulting from damage to insured property. This calculator uses a bottom-up approach starting with net income and adding continuing expenses which follows what Business Income coverage insures.  

A FEW IMPORTANT CONSIDERATIONS

Limit Insured

The limit insured is the maximum amount available to be paid out under the policy. This limit is subject to policy provisions such as waiting periods and coinsurance. Seek professional insurance guidance to help ensure proper protection. Not all business income coverage is subject to a limit. With "actual loss sustained", coverage is limited to actual loss incurred not to exceed 12 months. 

Period of Indemnity

The "period of indemnity" is the maximum expected period of recovery in event of total loss (in months). This timeframe is taken into consideration in determining the appropriate coverage limit. Often once operations resume after a loss, it takes time for revenues to reach pre-loss levels. An Extended Period of Indemnity endorsement may be added to extend coverage to take this into consideration. 

Waiting Periods

Waiting periods are built into business income forms. This acts as a deductible. Waiting periods apply to business income coverage, not extra expense. Business income loss that occurs during the waiting period, typically the first 24 to 72 hours, is not covered by business income coverage. Some policy forms can be endorsed to remove the waiting period entirely. 

SMALL STEPS. BIG PROTECTION.

Too many people purchase insurance as if a loss will never happen to them. Truth is that insurance should be purchased as if a loss with absolutely happen.
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INFORMATION NEEDED TO CALCULATE BUSINESS INCOME/EXTRA EXPENSE EXPOSURE

 

Net Income (or net loss)

before taxes 

 

ALL Expenses including payroll but excluding

Cost of Goods Sold 

 

% Expected Growth for the

12-month period insured 

Extra Expense (the anticipated extra costs to operate/move

to a temporary location) 

Maximum expected recovery period (restoration often takes longer than anticipated) 

Input from your

insurance professional

before placing this coverage