Some Basics on Contingent Business Interruption and Contingent Extra Expense Coverage

Originally published in the NEW JERSEY LAWYER | August 2012.

Companies with business interruption (BI) and extra expense (EE) insurance should also be familiar with related counterparts to those coverages—contingent business interruption (CBI) and contingent extra expense (CEE) coverage. Like BI and EE coverages, CBI and CEE coverages are extensions of first-party property insurance. Together, CBI and CEE are sometimes referred to as contingent time element coverage.

While BI and EE insure lost profits and extra expenses incurred due to an interruption of business resulting from damage to or destruction of the insured’s property, CBI and CEE reimburse a company for lost profits and extra expenses incurred because of an interruption of business resulting from damage to or destruction of property of others.