Increased Cost of Working & Extra Expense
Increase in cost of working (ICW) clauses reimburse additional expenditure reasonably incurred to avoid or reduce the reduction in gross profit, subject to economic limit tests and monetary caps. Experts distinguish recoverable mitigation from uneconomic spend that fails the policy arithmetic.
Where US-style extra expense coverage sits alongside UK ICW, experts map each cost line to the correct insuring clause, credit savings, and avoid double recovery across heads of cover.
| Test | Question | Output |
|---|---|---|
| Economic limit | Did ICW spend avoid more gross profit loss than it cost? | Pass/fail with workings |
| Causation | Was spend driven by the insured peril? | Narrative + invoice trail |
| Offset | Any savings on uninsured charges? | Net ICW position |
| Reporting | CPR-compliant ICW appendix | Joint statement-ready tables |
Frequently asked questions
What is increase in cost of working (ICW)?
ICW reimburses additional expenditure reasonably incurred to avoid or reduce the reduction in gross profit during the indemnity period, subject to policy wording, economic limit tests, and monetary caps.
What is the economic limit test for ICW?
The spend must avoid more gross profit loss than it costs - experts compare incremental ICW to the gross profit preserved, credit any savings on uninsured charges, and map each invoice to causation from the insured peril.
How is UK ICW different from US extra expense?
UK ICW and AICOW are policy-defined heads with economic limits under ISR-style wordings. US extra expense sits in separate business income forms; in global programmes experts allocate each cost line to the correct clause to avoid double recovery.
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