Streetsmart insurance Blog
Like service providers, wholesalers rely on dedicated customers to make a living. If any of their customers suffer from a financial loss that could prevent them from making a scheduled order, the wholesaler would be forced to compensate for their own financial loss by pulling money from other parts of their business.
Contingent Business Interruption (CBI) coverage can reimburse business owners if their customers are unable to complete an order because of a problem with their own business. If the business interruption is caused by a covered peril, the wholesaler can use CBI coverage to pay for the financial losses that they have incurred.
…But Isn’t That Business Interruption Insurance?
Like CBI coverage, business interruption insurance can help you recover from financial losses if a covered peril forces you to close your doors. However, each policy is tied to a different location: business interruption insurance covers damage to your business, while CBI covers losses that are connected to your customer’s business.
For example, imagine that Lisa Ludlow owns Ludlow Lace Emporium. Lisa sells lace to several clothing manufacturers, but her biggest client is Bella Bella Dress Company. Every month, Lisa sells thousands of dollars in lace to Bella French, the owner and main buyer for Bella Bella Dress Company.
In February, Bella gives Lisa a call to let her know that there has been a fire at their main warehouse. Bella won’t be able to put in another order for lace until the damage is repaired and their machinery is up and running. Lisa calls her insurance agent to discuss the problem; her insurance agent reminds her that she has CBI coverage. Lisa’s insurance will cover her expenses because her customer’s business was impacted by a covered peril.
Does CBI Cover Anything Else?
CBI coverage also covers merchandise that is stolen, damaged, or destroyed before it reaches the policy holder. If you purchase your products from a manufacturer, CBI coverage can help you recover from financial losses when your supplier is unable to deliver their merchandise.
Like many business insurance endorsements, CBI coverage can be tailored to the needs of your business. Contact your insurance agent more information on CBI coverage, business interruption insurance, and other insurance policies for wholesalers.
Street Smart Insurance is committed to providing affordable coverage. Whether you are looking for your first business insurance policy or you are shopping for a better price, our agents are ready to help. Call us at 732-462-8343 for a free quote!