A restaurant that has had a covered fire is voluntarily paying the tips to wait staff in hopes of retaining staff when they reopen. Is this considered an additional expense(to be covered) incurred due to the loss ? They have advised that others in the same industry have seen tips covered since COVID.

Oklahoma Subscriber

In reviewing the extra expense coverage of the ISO CP 00 32 form, extra expenses are covered if they avoid or minimize the suspension of business during the period of restoration. "Suspension" means the slowdown or cessation of your business activities. Tips are basically part of the wait staff wages. If paying the staff tips during the suspension does indeed reduce the time or expense of the period of restoration, then such tips would qualify as a valid extra expense. It reduces the period of time that the insured could reopen by having experienced staff ready to start immediately upon reopening.