Expediting Expenses Clause
The expediting expenses clause covers extra costs incurred to speed up the repair or reinstatement of damaged property, thereby limiting the resulting business interruption loss.
- Clause type
- Extension
- Origin/Market
- International programme
- Favours
- Insured
- Negotiability
- Negotiable
Purpose
The longer repair or reinstatement of a damaged property takes, the greater the resulting business interruption loss tends to be. The expediting expenses clause creates both an incentive and a source of funding to accelerate reinstatement, even where doing so itself generates additional cost – for example through express freight, overtime or weekend working.
Effect and limits
Cover typically reimburses extra costs for express and air freight, overtime, Sunday and public holiday premiums, and comparable acceleration measures connected with the insured repair or replacement. Reimbursement is usually capped at the amount by which the overall loss – property damage and business interruption combined – is actually reduced by the acceleration; pure convenience or speed-up costs without a demonstrable loss-mitigation benefit are generally not covered. Some wordings instead apply a fixed percentage cap on the extra cost, regardless of proof of loss mitigation.
Negotiation and practice
For businesses with high business interruption exposure, it is worth clarifying up front whether reimbursement is tied to proof of loss mitigation or paid on a flat basis, since this materially affects the administrative burden at claims stage. The clause should be aligned with the business interruption cover so that acceleration costs and avoided loss of income are neither double-counted nor left unaddressed.