Overlooked? Contingent Business Interruption Coverage

Most of you are aware of business income coverage, coverage that protects against loss of revenue due to a covered loss of property. While this is the most often used income coverage, there is another out there that you might not be aware of and it could possibly be of great importance to some of you. The coverage in question, Contingent Business Interruption Coverage is for loss of income due to damage by an insured peril to non-owned property. Many of you have a contingent business interruption exposure that you might have overlooked if you haven't thoroughly reviewed your exposures. The exposures this coverage would apply to are - Key Suppliers - if a sole supplier of a key component used in the insured's product suffers a major property loss and the insured is unable to replace the product with another, the resulting loss of revenue can be insured; Key Customers - if 10 percent or more of revenue is dependent on a single customer, coverage can be purchased to insure the loss of revenue experienced if that customer should stop using the insured's product; Critical Means of Transportation - if the insured relies on transportation of supplies, or it's product by means of a single available route. The loss or revenue if that route were to become unavailable for an extended period should be considered; Leader Locations - if a significant part of your customer base comes from another business, the risk to revenues of that "leader" business were to close for a period of time following a major property loss should be considered.An example would be a restaurant in a shopping mall that depends on the draw of a major department store in that mall for it's customers.

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