We insure a retail operation under a standard commercial property policy  with business income and extra expense coverage. Our insured suffered a windstorm loss at his store. All of the inventory (stock) at the store was damaged.

The insurer has settled for the direct damage to the inventory. They have also arranged for sale of the salvage.

However, the store now has to be restocked. This involves about a two to four week process of unloading trucks, setting up the merchandise, including some decorating and displays. In other words, a lot of labor dollars must be spent on paying temporary help.

Is the restocking of the store (i.e., the labor costs involved) covered as an additional expense?

Ohio Subscriber

The commercial property policy defines extra expense as "[those] necessary expenses you incur during the 'period of restoration' that you would not have incurred if there had been no direct physical loss or damage to property caused by or resulting from a Covered Cause of Loss."

The store cannot open until the stock is replenished. Since the insured is obligated to accomplish this as quickly as possible, the extra expense he incurs to restock the shelves is covered.