Contingent Business Income Insurance

Last updated: March 16, 2017

What Does Contingent Business Income Insurance Mean?

Contingent business income insurance is a type of business insurance that is designed for businesses who rely on third parties for major parts of their operation. Contingent business income insurance covers losses incurred as the result of an interruption to the third party that the business relies upon. This type of insurance can prevent businesses from suffering major losses when something goes wrong at one of their suppliers


Insuranceopedia Explains Contingent Business Income Insurance

For businesses whose income is contingent upon a third party upholding it's end of the arrangement, a business interruption to the third party can cause substantial losses to the business. For example, a solar panel company whose key supplier experiences a major business interruption can cause tremendous losses for the solar company. Contingent business income insurance is designed to provide compensation for such losses. This type of insurance can reimburse lost income and also ongoing expenses for the business during the major interruption.


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