Some insurers cover Business Interruption or Contingent Business Interruption (CBI) losses that do not result from actual physical damage to a policyholder’s or its suppliers’ property.
Under the property policy written by Factory Mutual Insurance Co. (which does business as FM Global), CBI coverage is not limited to loss resulting from suppliers’ facilities that are compromised.
If policyholders can adequately identify their suppliers, the insurer can provide up to $100 million in limits covering CBI losses stemming from utility-service interruptions; actions by civil and military authorities; blockage of ingress and egress; and construction delays, says Gary Love, vice president and staff operations underwriting manager at FM Global.
“We’re trying to treat those locations as if the client owned them,” Love adds.
Zurich writes up to $100 million in all-risk CBI limits to dovetail with its coverage for named physical-damage perils. Among other events, the all-risk policy would cover losses resulting from power interruptions and ingress/egress blockages—two major causes of supply-chain disruption in Japan after the March 2011 earthquake-triggered tsunami there, says Linda Conrad, the insurer’s director of strategic business risk management.
Allianz Global Corporate & Specialty earlier this year launched a nondamage Business Interruption and CBI insurance policy that provides up to $50 million in limits to large industrial companies.
It covers losses resulting from political risk, a labor strike or lockout, utility-service interruption, insolvency of a supplier, actions by military authorities, and ingress/egress problems unrelated to military actions.