Contingent Business Interruption Insurance Law and Legal Definition
It is an insurance policy that provides benefits if earnings are reduced because of damages to another business on which one’s business are dependent. Contingent business interruption (CBI) insurance is an extension to other insurance that reimburses lost profits and extra expenses resulting from an interruption of business at the premises of a customer or supplier. CBI insurance is also known as contingent business income insurance or dependent properties insurance. Companies purchase this type of insurance as an extension to their standard property insurance.
There are four situations in which this coverage is used.
1. When the insured depends on a single supplier or a few suppliers for materials.
2. When the insured depends on one or a few manufacturers or suppliers for most of its merchandise.
3. When the insured depends on one or a few recipient businesses to purchase the bulk of the insured’s products.
4.When the insured counts on a neighboring business to help attract customers, known as a leader property.
Legal Definition list
Related Legal Terms
- Accelerated Life Insurance Benefits
- Accident Insurance
- Accidental Death and Dismemberment [Insurance]
- Accommodation Line [Insurance]
- Accountants Professional Liability Insurance
- Accounts Receivable Insurance
- Actual Cash Value Insurance
- Actual Delivery of Insurance Policy
- Actuarial Documents [Federal Crop Insurance Corporation]
- Actuarially Appropriate [Federal Crop Insurance Corporation]