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Contingent Business Interruption (CBI)
Contingent Business Interruption (CBI)
Contingent Business Interruption (CBI) and Dependent Business Interruption are essentially the same concept. They both refer to insurance coverage that protects businesses from financial losses due to disruptions at their suppliers, customers, or at other third-party entities.
Applied To Cyber Coverage: If an organization’s software or any of its IT services go down for any reason, it can become difficult, even impossible, to conduct business or collect revenue. Cyber liability insurance that includes CBI coverage helps policyholders recover from the financial damage resulting from these types of IT service provider disruptions and outages. it can be key to TPRM.
A Cyber Insurers Perspective:
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The Rise of Third-Party Risk — and How to Protect Your Business
CBI, also known as dependent business interruption, covers a business’s loss of income and associated expenses resulting from disruptions at a key external party, such as a supplier, vendor, or customer.
If a business relies on a third-party provider, and that provider experiences a disruption (e.g., a fire, cyberattack, or shutdown), the CBI policy can help cover the financial impact on the insured business.
- An online retailer whose website is inaccessible due to an outage at their outsourced web hosting provider.
- A manufacturing company whose production is halted because a key supplier’s plant is damaged.
- A business that loses a major customer due to a disruption at that customer’s location.
CBI typically covers physical property damage to suppliers or customers, but it may not protect against all perils or cover road closures or other suppliers being affected.
