01 / The meaning
What it means.
The commercial consequences can include production delays, increased purchase costs, unfilled orders and lost revenue. Identify which dependency caused the interruption rather than treating all lost trading as the same exposure. Physical damage at a supplier, a transport delay and a supplier’s insolvency can have different implications. Several apparently independent suppliers may also rely on the same upstream manufacturer or logistics route.
Ordinary business interruption insurance does not necessarily address disruption without damage at the insured premises. Supplier or customer extensions, contingent interruption and specialist policies have their own triggers, geographic restrictions and limits. Preventive planning remains important: document critical dependencies, realistic alternatives and the time needed to qualify a replacement supplier. Insurance assessment should sit alongside purchasing and continuity decisions rather than replace them.
02 / Put it in context
A practical example.
Hypothetical example: a food producer depends on one packaging supplier whose factory suffers a fire. It investigates alternative packaging and records additional costs, while checking whether the supplier, damage event and interruption fall within any relevant extension.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Map critical suppliers, upstream dependencies and transport or technology bottlenecks.
- Check supplier-related cover triggers, named locations, territories and sublimits.
- Estimate substitute supply lead times and keep evidence of additional costs and lost orders.
04 / Start a useful conversation
A question for your broker.
Which dependencies could stop our trading, and does our insurance address the particular causes of their interruption?
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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