An expense that is insured under a business interruption insurance. It is the additional expense necessarily and reasonably incurred for the sole purpose of reducing the shortfall in turnover during the indemnity period. For example, the business may have to rent alternative premises and/or pay overtime to make up for lost production. The insurer will not pay for increased costs in excess of the loss of the gross profit that the extra costs have served to avoid.
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Under a business interruption policy the occurrence of the event insured against may cause the insured to incur increases in his costs in endeavoring to maintain production. The insurance provides some cover in this respect.