Would training cost of new employees after a fire be considered to be extra expense?  

Pennsylvania Subscriber

Based on the coverage provided in the current ISO Business Income (And Extra Expense) Coverage Form CP 00 30, Business Income coverage provides for continuing operating expenses, which includes payroll expenses that continue during the "period of restoration". If the new employees are necessary replacements of employees due to the fire loss, and the payroll expense is necessary to continue the insured's operations during the "period of restoration", then the payroll should be considered as part of the normal business income coverage. However, if these are simply new employees that are added to staff following the fire loss, and their employment is not necessary to continue operations during the "period of restoration", then there would be no coverage.

With respect to the training expenses as extra expense for these new employees, the coverage form provides for extra expense that is necessary to avoid or minimize the suspension of business and to continue operations. These extra expenses would have to be expenses that the insured incurs during the "period of restoration" that they would not have incurred if there had been no fire. If the training was a necessary expense that meets these qualifications then there should be coverage. However, if they are simply training expenses for new employees that are not a necessary component to continue operations during the period of restoration, then there would not be coverage.

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