extra expense, AICOW & Extra Expense Disputes - BI Expert Witness
Disputes over extra expense, additional increased cost of working (AICOW), and US-style extra expense often turn on whether each line of spend passes economic limit tests and whether savings have been properly credited. Experts rebuild the counterfactual: what business income would have been lost absent the expenditure, and whether the policy arithmetic permits recovery.
Hybrid global programs may stack US Extra expense clauses with foreign extra expense endorsements. Specialists reconcile currency, tax treatment, and sub-limits so quantum opinions do not double count recovery.
Daubert-compliant expert reports should disclose judgment calls on reclassified costs and present alternative treatments where professional practice reasonably differs.
Frequently Asked Questions
What is the economic limit test for extra expense?
Broadly, insurers only reimburse Extra expense spend that avoids more business income loss than it costs - preventing recovery of uneconomic mitigation. The exact formulation depends on policy wording; experts model the comparison using disclosed invoices and projected business income.
How do experts separate extra expense from uninsured working expenses?
They map each cost line to the policy’s lists of uninsured working expenses and insured standing charges, then test whether spend is truly variable to revenue or fixed - misclassification is a frequent driver of disputed quantum.
Glossary Terms
Short definitions for terminology used on this page - see the full business interruption glossary.
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