insurance

Expediting Expense

Additional costs incurred to speed up repairs, replacement, or resumption of business operations following a covered loss. These expenses include overtime labor, express shipping, temporary repairs, and rush charges to minimize business interruption.

Example

“After the restaurant's kitchen equipment was damaged by fire, the expediting expenses included $15,000 in overtime labor and rush delivery fees to reopen within one week instead of waiting a month.”

Memory Tip

Think 'Expediting = Expensive Speed' - you pay extra to expedite (speed up) your recovery after a loss.

Why It Matters

Quick recovery after a disaster can mean the difference between survival and business failure, as customers may permanently switch to competitors during extended closures. Expediting expense coverage helps businesses minimize lost revenue by enabling faster restoration, though the extra speed comes at a premium cost.

Common Misconception

Business owners often think expediting expenses are automatically covered under standard property insurance. Most policies require specific expediting expense coverage or include it only up to limited amounts, and coverage often applies only when it actually reduces the period of business interruption.

In Practice

Manufacturing company ABC suffers equipment damage that normally requires 8 weeks to repair, causing $200,000 in lost profits. By spending $50,000 in expediting expenses (overtime labor, rush shipping, temporary equipment), they reduce downtime to 3 weeks and lost profits to $75,000. The net benefit is $125,000 ($200,000 - $75,000) minus $50,000 expediting costs, resulting in $75,000 savings, making the expediting expenses financially worthwhile.

Etymology

From Latin 'expeditus' meaning 'freed from impediments' or 'speedy,' combined with 'expense,' reflecting the extra cost of removing obstacles to quick recovery.

Common Misspellings

Expedting ExpenseExpediting ExpenceExpeditting ExpenseExpediting Expense

Related Terms

Extra Expense Coverage

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