What does contingent business and extra expense coverage protect against?

Contingent business interruption coverage specifically addresses losses that a business may incur due to the operational interruption of a supplier's or customer's premises that the insured does not own. This type of coverage is crucial for businesses that rely on third-party vendors or customers to conduct their operations effectively. If, for example, a significant supplier experiences a loss or damage to their facilities that affects their ability to deliver goods, the insured business might suffer financial losses as a result.

Extra expense coverage complements this by covering additional costs incurred to avoid or minimize disruption when the business is affected by such contingent losses. This can include costs for relocating operations temporarily or overrunning to meet operational needs while facing a disruption caused by a third party.

The other responses do not align with the specific protections offered by contingent business and extra expense coverage. For instance, equipment breakdown, regulatory changes, or employee misconduct are covered under different types of insurance products, such as property insurance, operational liability insurance, or employment practices liability insurance.