What Is Contingent Business Interruption Coverage in Cyber Liability Insurance?

What Is Contingent Business Interruption Coverage in Cyber Liability Insurance?

Contingent Business Interruption (CBI) coverage—also referred to as Dependent Business Interruption coverage—is a critical but often overlooked part of a cyber liability insurance policy. It protects your business when a key third-party vendor, partner, or service provider experiences a cyber incident that disrupts your operations.

In today’s interconnected world, your business likely relies on cloud platforms, software vendors, payment processors, and suppliers to operate efficiently. If one of them suffers a cyber attack, the impact on your business can be significant. That’s where contingent business interruption coverage comes in.

What Does Contingent Business Interruption Coverage Do?

CBI coverage helps reimburse your business for financial losses caused by a cyber incident that affects a critical third party your business depends on. These losses may include:

• Lost revenue from halted business operations
• Extra expenses to maintain operations during the disruption
• Costs of switching to alternative suppliers or service providers

Real-World Example of CBI Coverage

Let’s say your main supplier is hit with a ransomware attack and their systems go offline. As a result, you don’t receive key materials needed to fulfill orders. You lose revenue, miss deadlines, and scramble to find a temporary replacement.

Without CBI coverage, you're likely absorbing all of those losses yourself. With it, your cyber insurance policy may step in to help cover the gap.

Why This Coverage Matters More Than Ever

Modern businesses are part of complex digital ecosystems. Whether it’s a cloud provider hosting your data or a payment gateway facilitating your transactions, third-party dependencies are everywhere.

Unfortunately, those partners can also be a point of vulnerability.

• A cloud provider outage could mean downtime for your entire operation.
• A software vendor breach could disrupt your ability to serve customers.
• A vendor’s malware incident could delay production, even if your systems are secure.

Contingent Business Interruption coverage acknowledges these real-world risks and provides a financial safety net.

How CBI Fits Into a Cyber Liability Policy

Contingent Business Interruption is just one part of a comprehensive cyber liability policy. Other key coverages may include:

• Data Breach Coverage
• Cyber Extortion and Ransomware Protection
• Business Interruption from Internal System Failures
• Legal and Regulatory Defense Costs

Together, these coverages help your business weather both direct and indirect cyber threats.

Is Your Business Properly Protected?

While having strong internal cyber security is essential, it's no longer enough. A proactive approach means:

• Performing regular cyber risk assessments
• Reviewing your third-party dependencies
• Having contingency plans in place
• Making sure your cyber insurance policy includes CBI coverage

In the event of a disruption you can’t control, CBI coverage ensures your business doesn't bear the full cost alone.

Final Thoughts

Contingent Business Interruption coverage is a vital layer of protection in today’s digital world. It safeguards your business from the ripple effects of cyber attacks on your supply chain and service providers—giving you peace of mind and business continuity when the unexpected happens.

If you're unsure whether your current cyber policy includes CBI coverage or if you want to review your protection in detail, don’t wait.

📞 Contact us today to schedule a free policy review and make sure your business is protected from all angles.