Definition:Additional increased cost of working
🏭 Additional increased cost of working is a component of business interruption insurance that covers the extra expenses an insured business incurs to maintain operations — or resume them more quickly — following a covered loss event such as a fire, flood, or other insured peril. Unlike standard increased cost of working, which is recoverable only to the extent that it reduces the overall business interruption loss, additional increased cost of working provides a separate, standalone limit that reimburses extraordinary expenditures regardless of whether they produce a corresponding reduction in the interruption claim. This distinction makes it a valuable extension for businesses that need operational continuity at almost any cost, such as hospitals, data centers, or financial institutions.
⚙️ When a covered event disrupts operations, the insured may need to relocate to temporary premises, lease emergency equipment, pay overtime wages, or engage specialist contractors — all at a premium over normal operating costs. Under a standard increased cost of working provision, the insurer reimburses these expenses only up to the amount of gross profit loss they actually prevent; spending beyond that threshold falls back on the policyholder. Additional increased cost of working removes that economic test. It pays out against its own sub-limit within the policy, so even if the extra spending exceeds the revenue it saves, the insured still recovers. Policy wordings vary across markets — in the United Kingdom and Australia, the terminology aligns closely with the conventions set by bodies such as the BIBA and local market practice, while in Continental Europe and parts of Asia the equivalent cover may be structured differently under local policy wordings and sometimes labeled as "supplementary increased costs" or embedded within broader extensions.
💡 For risk managers and brokers advising commercial clients, understanding the mechanics of this cover is essential to avoiding dangerous gaps in protection. A business that assumes all extra expenses will be reimbursed under a basic business interruption policy may discover — only at claims adjustment — that costs exceeding the economic justification test are unrecoverable. Securing a well-sized additional increased cost of working limit ensures the insured can prioritize rapid recovery without second-guessing every expenditure. Loss adjusters scrutinize these claims carefully, so maintaining detailed records of each incremental expense and its operational purpose is critical to a smooth settlement.
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