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Simple English definitions for legal terms
prophylactic cost
Read a random definition: contingency
A quick definition of prophylactic cost:
Prophylactic cost: The money spent to prevent potential harm to property in the future. These costs are not related to any existing damage and are usually not covered by insurance. For example, installing a fence around a property to prevent trespassing or adding fire-resistant materials to a building to prevent fire damage.
A more thorough explanation:
Prophylactic cost refers to the expenses incurred by a party to prepare their property to prevent potential future harm. These costs are not related to any existing property damage and are usually not recoverable under insurance contracts.
For example, a homeowner may install hurricane shutters on their windows to protect their property from potential damage during a storm. The cost of installing these shutters is a prophylactic cost.
Another example is a business investing in cybersecurity measures to prevent potential cyber attacks. The cost of implementing these measures is a prophylactic cost.
Overall, prophylactic costs are expenses incurred to prevent future harm and are not related to any existing damage.