Other Than Life (OTL) Practice Exam

What type of insurance allows a business to cover the ongoing expenses while operating at a new location after a fire?

1. A Profits form policy

2. A fire policy

3. Extra Expense Insurance

4. Gross Earnings Policy

The correct answer is: Extra Expense Insurance

The type of insurance that allows a business to cover its ongoing expenses while operating at a new location after a fire is Extra Expense Insurance. This type of policy is specifically designed to help businesses manage additional costs incurred as a result of a disaster, such as a fire. It provides financial support to cover expenses that are above what the business would typically incur if there had been no interruption, ensuring that the business can maintain operations during the transition period to a new facility. In the context of recovering from a fire, it serves to safeguard against the potential loss of income while the business is relocating and getting back on its feet. This type of coverage is particularly essential for businesses that cannot afford to lose momentum or operational capabilities, thereby enabling them to continue serving their customers and minimize loss of revenue. Other options, while related to covering various aspects of business interruption or property damage, do not specifically focus on the additional expenses incurred during the process of relocation and ongoing operations in the aftermath of a fire. Profits form policies and Gross Earnings Policies tend to emphasize income replacement rather than additional expenses, while a fire policy is more about property damage coverage.