Property · Insurance Term
Extra Expense
Definition
Extra expense coverage pays the reasonable added costs you take on to keep operating, or to reopen faster, after a covered loss. Examples include renting temporary space, speeding up repairs or renting equipment. It is often paired with business income coverage on the same form.
In Plain English
When property is damaged, spending money quickly can prevent a longer shutdown. Extra expense pays costs beyond your normal expenses during the period of restoration, as long as they help you avoid or shorten the interruption.
The standard CP 00 30 Business Income (and Extra Expense) Coverage Form combines business income and extra expense. The CP 00 32 Business Income (Without Extra Expense) form generally pays added costs only to the extent they reduce the business income loss. Some policies sell extra expense alone for operations that can't afford to stop.
Examples include temporary offices, generators, overtime to finish repairs sooner and moving inventory. Civil authority coverage may also include extra expense when authorities block access to your property.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: A fire damages the leasing office of a 200-unit apartment community. The owner rents a temporary office trailer for $3,000 a month for four months and pays $5,000 to move files and phones. Extra expense coverage may pay about $17,000 of these costs, subject to the policy's terms.
What to Watch For
- Check whether your business income form includes extra expense (CP 00 30) or not (CP 00 32).
- Keep receipts for every added cost after a loss.
- Talk with the adjuster before large extra expenses when you can.
- Ask whether extra expense has its own limit or shares one with business income.
Common Questions
What's the difference between business income and extra expense?
Business income replaces lost profit and continuing expenses. Extra expense pays added costs to keep operating or reopen faster.
Do extra expenses have to save the insurer money?
Under the CP 00 30 form, reasonable costs to avoid or shorten a shutdown are generally covered up to the limit, even if they cost more than the income saved. Under CP 00 32, added costs are generally paid only to the extent they reduce the business income loss.
Last updated October 14, 2026 · Primesure editorial team · How We Write