This clause is included in the basic property coverage form of one insurer. Entitled “Extra Expense, Expediting Expense, and Loss Adjustment Expense.” Coverage is limited to $10,000 or 10 percent of the combined business real and personal property loss, whichever is less. Note that only expense involving employees’ work is intended to be covered, and not the cost of using outside auditors, public adjusters, or other professionals, unless the policy is specifically amended to that effect. However, in a case decided on appeal in New York State, Tri Town Antlers Foundation v. Fireman’s Fund Ins. Co. (7-10-90), the court, with two justices dissenting, found this language sufficiently ambiguous to allow recovery by the policyholder of $8,709.14 of a public adjuster’s fees as “wages paid to employees.” Whether other courts would agree is a good question, so given the chance before a loss occurs, an insured, who would expect to use outside professionals in claim preparation, would do well to seek broader language that clearly includes coverage for the cost of outside professionals.
This clause is part of a basic property form, rather than an endorsement. It does not limit coverage to specific types of professionals. The $5,000 limit is stated, in a later clause of the form, to be a separate amount of insurance, applying as excess over any other applicable coverages.
This endorsement, with a fixed limit of $5,000, is offered without charge to contractors, manufacturers/processors and wholesalers/distributors. The coverage applies to anyone providing the claimpreparation service, including public adjusters and consultants. (Note that this insurer has taken the position that, while not stated in the endorsement, they will not pay fees for public adjusters calculated as a percentage of the loss.)
This clause, with a $5,000 limit on coverage for loss data preparation, seems to exclude “independent” insurance adjusters. However, to avoid possible controversy, this should be clarified with the insurer.
This clause, with a $10,000 limit on coverage, seems to include the services of any professionals used in proving and recovering a loss.