01 / The meaning
What it means.
A supplier’s damaged factory or a key customer’s damaged premises may affect a business even when its own property is unharmed. That does not mean every external interruption is insured. Wording may require damage of an insured type at specified premises, named suppliers or customers, territorial conditions and a qualifying financial effect on the insured business.
Map the dependencies that actually constrain trade, including specialist components, outsourced processing and major customers. Check whether direct and indirect suppliers are treated differently and whether utilities or access restrictions sit in separate extensions. Insolvency, ordinary delivery delays and a general fall in demand can require different analysis from insured physical damage. A separate sublimit or indemnity period can materially affect recovery even where the dependency trigger is satisfied.
02 / Put it in context
A practical example.
Hypothetical example: a packaging supplier suffers a factory fire and a food manufacturer cannot obtain its usual containers. The manufacturer documents the dependency and sales impact while checking supplier-premises damage requirements and available alternatives.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Identify which suppliers or customers are included or must be named.
- Check damage triggers, territory and direct-versus-indirect dependency rules.
- Compare the sublimit and recovery period with replacement lead times.
04 / Start a useful conversation
A question for your broker.
Does the extension address this particular dependency and the event that disrupted it?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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