Last week we had a client contact us about water damage to her rented premises. She is a photographer renting a space which she uses as her studio. The landlord has a policy in force for the building damage.
How is she covered?
The Extra Expense & Business Income coverage are both triggered.
The Extra Expense coverage pays costs she incurs to relocate in order to minimize or eliminate income loss by allowing her business operations to continue. It pays any related expenses she would not normally incur. If the rent at the temporary location is more, we can address the difference assuming her selected location is reasonable and comparable.
The Loss of Income will reimburse her for business income lost because she had to cancel scheduled shoots.
Because she is a tenant she is not obligated to pay rent to the landlord while the landlord is working to get the space fixed. So, there is no coverage for rent at her original location because it is not a continuing/incurred expense. She is diverting her standard monthly rent expense from her old landlord to her new temporary landlord. She will now pay rent to her new temporary landlord until her original space is repaired, thus, not incurring additional expense. (If she had been the building owner, her policy would have paid for temporary rental expense away from the damaged premise, because she would still have a mortgage on her owned building.)
It is important to remember that all claims are investigated individually on their own merit. This blog is advisory and not a guarantee of coverage as each policy has specific wording defining coverage, exclusions, and limitations. I can be reached at 801-451-8880 for any questions. IF you are not a current client and would to get a customized quote please Request A Quote