There are many different types of business insurance, with one of those being contingent business interruption insurance. This insurance is a type of small business insurance that will provide a business owner financial assistance when his or her business is adversely affected through the loss of a major supplier, a partner, or an important customer. In other words, if your business loses significant revenues, leaving you virtually unable to do business, contingent business interruption insurance can kick in and keep your business afloat.
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Like other types of insurance, contingent business interruption insurance can come with its own set of complexities, and, in some cases, it can be difficult to convince the insurance company to pay your claim. Insurance companies have one goal—to ensure their financial bottom line is healthy. If you believe your insurance company is acting in bad faith, it could be beneficial to you and your business to speak to a knowledgeable attorney from Gulf Coast Insurance Attorneys. Simply having an attorney on board can often convince an insurance company to do the right thing. We will fight hard for your rights and your future at Gulf Coast Insurance Attorneys.
What is Contingent Business Interruption Insurance?
Contingent business interruption insurance is typically added as a rider to a business interruption insurance policy. This type of insurance can provide cash that will allow you to cover your basics—rent, payroll, and other necessary expenses—to ensure your business stays open after losing significant revenues due to an unexpected occurrence. The caveat to this insurance is that, as with any type of business interruption insurance, the closure of your business must be related to a commercial property insurance claim. In other words, simply having a bad couple of months or a run of bad luck is not sufficient for your contingent business interruption insurance to pay.
Who Would Need Contingent Business Interruption Insurance?
There are many different business applications that could potentially benefit from this type of insurance. Smaller businesses, in particular, may rely heavily on a single supplier (or a relatively small number of suppliers) as well as a small number of customers and manufacturers. As an example, suppose you owned a restaurant that depended almost entirely on foot traffic from the neighboring mall. If that mall were to be right in the line of a hurricane that virtually took it out, the restaurant would also suffer even if it were not severely damaged by the hurricane.
An accountant who was on retainer for a large law firm—and who depended on the law firm for 85 percent of its business—could be significantly hurt if the law firm burned to the ground and it would be months before it was rebuilt. So, if your business depends heavily on a single supplier, customer, manufacturer, or business generator, it would be a smart move to purchase contingent business interruption insurance. Again, it only kicks in when the disruption to your business is directly related to physical damage or to another commercial insurance property claim.
Do You Need Contingent Business Interruption Insurance Coverage?
Ask yourself how much of your business operations depend heavily on another entity. If there were to be a long-term computer outage, would that significantly affect the ability of your business to maintain normal business operations? If there was a transportation disruption or you lost a key component from one of your suppliers, how devastating would it be to your business—and your livelihood? Having contingent business interruption insurance coverage could significantly soften the financial impact of any of these events and much more. Getting an insurance claim for this type of insurance paid out, however, can be extremely challenging, so if you decide to purchase contingent business interruption insurance, make sure you fully understand all the ins and outs.
Contingent business interruption insurance—as well as contingent extra expenses coverage—are extensions to other insurance that will reimburse you for lost profits and extra expenses as a result of an interruption to your business. The contingent property could be named specifically or could be a blanket policy for all your suppliers, manufacturers, and customers. Remember, your business does not have to be entirely shut down to trigger contingent business interruption. All that is necessary is that your regular business is interrupted due to a loss.
How an Attorney from Gulf Coast Insurance Attorneys, Can Help You
At Gulf Coast Insurance Attorneys, we help people in need. Perhaps these people are down on their luck after a huge property or business loss or are involved in an insurance dispute, dealing with a recalcitrant insurance company that delays, denies, or undervalues the claim. When people come to us with a problem or a challenge, we will go out of our way to find a solution for them. We want to get you back on track after the insurance company pays you what your claim is worth. Contact Gulf Coast Insurance Attorneys today for a free consultation.