Contingent Business Interruption (CBI) Insurance: When Winter Storms Impact Your Suppliers or Customers

Robyn L. Michaelson

Michaelson, Robyn L.The National Oceanographic and Atmospheric Administration recently released its early forecast for this winter, predicting below-normal temperatures in the southern states and more snow and ice in the Southeast.[1] As we learned in winters past, the South can quickly grind to a halt after just a few inches of snow. If you or a business you rely on operates in the Northeast, you likely have your insurance squared away in case of storms. But you may not have considered similar problems with a southern supplier.

Contingent business interruption (CBI) insurance reimburses lost profits and added expenses resulting from interruption of a supplier’s or customer’s business. This insurance protects the policyholder against lost sales or higher production cost based on an inability to purchase from or sell to that third party. A CBI policy may target one supplier or customer, or broadly cover all of the insured’s customers and suppliers. CBI coverage is usually triggered by physical damage to the covered customer’s or supplier’s property.[2] Continue reading “Contingent Business Interruption (CBI) Insurance: When Winter Storms Impact Your Suppliers or Customers”