Property · Insurance Term
Contingent Business Income (Dependent Property Coverage)
Definition
Contingent business income covers income you lose when a business you depend on suffers physical damage from a covered cause. That business might be a key supplier, a major customer or a nearby attraction that draws your customers. Your own property isn't damaged; the loss flows from damage at someone else's location.
In Plain English
Standard business income coverage pays when your own property is damaged. Contingent business income, often called dependent property coverage, stretches that idea to locations you don't own or operate. Policies usually sort these into suppliers, customers, manufacturers and "leader" properties that bring customers to you.
The leader property idea fits hospitality and retail well. A hotel that fills its rooms from a nearby convention center can lose bookings if that center burns. A distribution business can be halted by a fire at its main supplier just as surely as by a fire at its own warehouse.
Many policies include only a small amount of this coverage, or none, unless it is added by endorsement. The damage at the other location usually must come from a cause your own policy covers. Related coverages, such as utility services coverage for off-site power failures, fill different gaps.
Not sure how your policy handles this? Have us review it, or get a quote.
Example
Hypothetical and simplified: A 120-room hotel depends on a convention center two blocks away. A fire closes the convention center for six months, and the hotel's occupancy falls, costing $250,000 in lost income. If the hotel's policy includes dependent property coverage that reaches leader properties, part of that loss may be covered, subject to the limit and wording.
What to Watch For
- Ask whether your policy includes any dependent property coverage and what the limit is.
- List the suppliers, customers or nearby attractions your income truly depends on, and ask whether they need to be named.
- Check whether the coverage applies only to named locations or to any dependent property.
- Remember the damage at the other location usually must come from a cause your policy covers, so a flood there may not count if flood is excluded for you.
Last updated October 14, 2026 · Primesure editorial team · How We Write