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Businesses suffering damages due to a disaster (i.e., fire, quake, water loss) often take an enormous hit to their customer clientele – and their bottom line. A typical business interruption policy form provides the insurer will pay the actual loss of business income the insured sustains during the necessary suspension of its operations during the “period of restoration.” Without proper insurance coverage in place, a disaster could potentially lead to the closing of the business altogether. Although insurance policies are designed to help a business get back on its feet, there are several hidden costs resulting from the event damage that are not covered unless the business has an Extended Period of Indemnity Endorsement (EPI) in its insurance plan.

EPI fills a coverage gap

The Extended Period of Indemnity Endorsement extends ‘the covered loss period beyond the time required to restore the property.‘ Restoring a physical property takes a certain amount of time, but recovering the business lost during the rebuilding process – and in the months thereafter – takes resources. In many cases, additional time beyond what the typical business insurance coverage provides is needed to restore revenues to pre-loss levels.

If you want to make sure your client’s business is truly protected, adding EPI coverage will likely fill a gap your client probably didn’t realize exists. To understand the value of this additional coverage, your clients must first know what the base property insurance policy covers (or doesn’t cover). Business Interruption (BI) coverage protects a company’s income statement in the event of a covered loss for a given period. More directly, it compensates an insured for changes in revenues and expenses occurring when a company suffers a loss. EPI is a coverage extension within the traditional business interruption/property insurance policy. 

Making matters worse, after a disaster hits, but before the property is restored and the business re-opens, the full costs of operation are being absorbed without corresponding income, negatively impacting your client’s increasingly fragile bottom line.

With the purchase of the Extended Period of Indemnity Endorsement, these additional expenses are covered. When you obtain this coverage, a client must choose the period of time that they believe it would take their business to become 100% functional and back to pre-loss revenue. This endorsement provides peace of mind in an otherwise unexpected stressful event. The Extended Period of Indemnification Endorsement provides your insured with an otherwise un-collectable reimbursement that not only helps their business return to prosperity, but could be decisive to their company’s very survival.

Novita’s Business Income coverage with Extended Period of Indemnity = peace of mind

When evaluating options, how many months of rental income does your client’s current carrier provide? Some only offer one year, and at stated value. A look at recent disaster events, such as the 2018 Camp Fire and 2017 Tubbs Fire reveal this is far short of what is needed.

Novita Insurance Solutions EPI offers up to 24 months

Novita Insurance Solutions package offers up to 24 months of loss of rents at ALS (actual loss sustained). Meaning no matter what was quoted, should rents fluctuate during the timeframe of the loss (up or down), we cover how much was actually lost during the loss and reconstruction period up to 24 months. As an advantage, and to help clients get up and running at full speed, we offer an extended period of indemnity up to 365 days after a certificate of occupancy is issued.

This simple addition of Extended Period of Indemnity could make or break a company’s long-term recovery from a loss incident. We’re here to help you give your clients that peace of mind; contact us today.

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