Ensuring Contingent Business Interruption Coverage

Today, Insurance Law360 published a piece that I wrote regarding contingent business interruption coverage.  Are you wondering what is contingent business interruption insurance, and whether your business needs it?  I gave an overview of the coverage in the article:

First, an overview of contingent business interruption coverage. “Regular business-interruption insurance replaces profits lost as a result of physical damage to the insured’s plant or other equipment; contingent business-interruption coverage goes further, protecting the insured against the consequences of suppliers’ problems.” Archer Daniels Midland Co. v. Hartford Fire Ins. Co., 243 F.3d 369, 371 (7th Cir. 2001) (“Archer v. Hartford”).

Often times, however, when policyholders ask their insurers to cover losses stemming from contingent business interruption, the insurers refuse, asserting that there must have been a “total cessation” of business operations.  Insurers consistently argue that if there was no “total cessation” of business operations, they are not obligated to provide contingent business interruption coverage.  The insurers’ arguments, however, are wrong.  As I conclude in the article (advice that applies to many situations in which insurers have denied coverage for claims for their corporate policyholders):

In insurance coverage litigation regarding contingent business interruption losses, it is important to turn a critical eye on insurers’ arguments if they have denied coverage.

For the full article, click on over to Insurance Law360.com.

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