Business Interruption: Fundamentals of Extra Expense

The “Business Interruption: Fundamentals of Extra Expense” course teaches insurance professionals about the basic concepts surrounding Extra Expense coverage, including the types of Extra Expense and the methods for calculating appropriate Extra Expenses. The module is presented by Jack Conard, CPCU, Property Claims Manager at State Auto Insurance Company, and Randall Wilson, CPA/CFF/ABV, CFE, DABFA, CR.FA, FACFEI, Partner at RGL Forensics.

The module begins with a general overview of the objectives and definition of Extra Expense, then walks through an example of a calculation of Extra Expenses in a hypothetical claim. The presenters instruct the viewer on what documents are required, how to handle variable or fixed expenses, and how to handle seasonal trends. The course then explores how to determine if coverage applies, before discussing three major types of Extra Expense. The remainder of the course puts theory into action via many real-world examples, so that viewers can understand how Extra Expense is best calculated and how to handle a number of common pitfalls.

After completing the course, the attendee will be able to understand the purpose and definition of Extra Expense coverage; calculate Extra Expense costs based on projections of normal expenses; handle disputes over potentially controversial insured requests for coverage, such as grand reopening parties and multiple temporary locations; gather required documents and obtain necessary information even when records have been destroyed; discern when an expense should be considered “variable” or “fixed” and understand how to project those expenses differently; deal with records that may have been recorded on a “cash basis” and/or an “accrual basis”; identify seasonal trends in prior sales data and project lost sales accurately; make a determination as to when coverage begins and ends; and work with an insured to find creative solutions to get their business back up and running quickly after a loss. The course is designed for insurance professionals working in the area of property adjusting.