Contingent Business Interruption versus Extra Expense Insurance

Course: Insurance Planning
Lesson 6: Commercial Property and Liability Insurance

Student Question:

Can you please provide an example of contingent business interruption and extra expense insurance?

Laura

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Instructor Response:

Hi Laura,

Good question. Here’s how contingent business interruption insurance might apply. You own a nationwide chain of jewelry stores that specialize in gold/palladium alloys. Your palladium supplier is shut down because an earthquake damaged the mine. If the other palladium suppliers were committed to existing contracts and you had no source of palladium, then the contingency of the earthquake has interrupted your business.

Now let’s change the fact pattern a bit. Palladium is available, but only at much higher prices. The increase in price could be covered under added expense coverage.

How fully does this address your question?

Bruce