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ABC Paving owns a warehouse where they store all their pavers. Lightning strikes the warehouse, which burns to the ground and destroys the entire fleet of pavers. In order to complete the projects they are currently working on, ABC Paving has to lease four pavers from another company. What commercial insurance coverage might pay for this expense?

A. Preservation of Property
B. Legal Liability
C. Extra Expense
D. Order of Civil Authority

1 Answer

5 votes

Final Answer:

The commercial insurance coverage that might pay for the expense of leasing four pavers after a warehouse fire is C. Extra Expense.

Step-by-step explanation:

In the event of a disaster like a warehouse fire, commercial insurance coverage plays a crucial role in mitigating financial losses.

Extra Expense coverage specifically addresses additional costs incurred to maintain business operations.

In this scenario, the need to lease four pavers to fulfill ongoing projects qualifies as an extra expense resulting from the loss of the owned fleet.

While Preservation of Property focuses on protecting and preserving the owned property, Legal Liability pertains to liability issues, and Order of Civil Authority involves losses due to government actions preventing access to the insured property, none of these directly address the incurred expense of leasing equipment.

Extra Expense coverage is designed to cover the costs necessary to continue business operations after a covered loss.

In the case of ABC Paving, this coverage would likely assist in covering the expenses associated with leasing replacement pavers, allowing them to fulfill their project commitments and mitigate the impact of the warehouse fire on their business.

In summary, the appropriate commercial insurance coverage in this situation is C. Extra Expense.

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