Just one brief business interruption can be incredibly costly for an organization, often leading to serious reputational damages or long-term closures. Standard business interruption policies are vital in these instances, providing protection against a variety of common interruptions, including natural disasters, equipment damage, and vandalism.
 

But what happens when one of your suppliers or customers experiences an interruption that derails your operations? To help address this concern, contingent business interruption (CBI) insurance is crucial and has a number of unique benefits.

Coverage beyond standard business interruption policies—Unlike traditional business interruption insurance that compensates the policyholder for a loss resulting from damage to its own property, CBI insurance lets businesses transfer the risk of certain losses to the property of a third party. 

Reimbursement for a number of expenses—When in place, CBI insurance can help employers cover ongoing expenses—like payroll and rent—should the insured’s revenue stream be impacted by interruptions at a third party. In many cases, it is not necessary that the customer or supplier be totally shut down to trigger CBI insurance.

Protection for a variety of scenarios—In the policy itself, the covered third-party property may be specifically named, or the coverage may simply blanket all customers and suppliers. There are a variety of scenarios where this type of coverage is useful:

• When an insured business depends on a single supplier or a handful of suppliers for materials
• When a business relies on a single or a few key customers to purchase goods or services 
• When a business depends on a nearby attraction or neighboring commercial operation for customers

Want to Learn More About CBI Insurance?

To truly understand your CBI insurance needs, it’s important to assess your exposures. CBI exposures will differ depending on the industry you operate in, but are most common in manufacturing, retail, hospitality and professional services. To get started or to learn more about CBI insurance, contact Witkemper Insurance Group and Financial Services today.