Question

Ashley owns a retail shoe store that is insured for $120,000 under the business income (and extra expense) coverage form. Because of a fire, Ashley was forced to close the store for three months. Based on past and projected future earnings, Ashley expected the store to earn a net income of $30,000 during the three-month shutdown period if the loss had not occurred. During the shutdown period, there were no revenues, and Ashley had continuing expenses of $10,000. How much will Ashley recover for the business income loss

Answer 1

Answer: Ashley will recover a total of $40,000

Explanation: According to the business income (and extra expenses) coverage form. Ashley will be entitled to the expected earnings she is was to make if there had been no fire of $30,000 and any extra expenses incurred during the period of renovation of $10,000.