The insured has a loss of income with extra expense form. Their building was damaged so they rented a temporary location to continue operations until the original location is repaired.  The policy identifies two types of extra expenses. One is any extra expense "other than the expense to replace property." We refer to this as pure extra expense since there is no requirement that these expenses be limited to the extent they reduce the loss otherwise payable. The other coverage is for the extra expense to replace property, but that is limited to the extent it reduces the amount otherwise payable, i.e. the expenses must offset the BI claim.  Since the rental location is not a "replacement of property" but merely a temporary rental to continue operations it is our position that this would fall under the pure extra expense portion and not be limited to the amount it reduces the loss otherwise payable. Please give us your opinion. Thank you.

Michigan Subscriber

 The purpose of extra expense coverage is to minimize the suspension of the business and continue operations. Since the insured rented the temporary location specifically to continue operations, we agree with you that this is indeed a pure extra expense.