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Our goal is to instill confidence that CCIG is your partner in navigating a complex insurance landscape with your best interests in mind.
Why a Vendor Outage Could Be Your Most Expensive Risk
Few businesses operate in isolation in our interconnected economy, and with that connectedness comes risk. Restaurants rely on cloud-based point-of-sale systems. Retailers depend on e-commerce platforms and delivery partners. Distributors count on digital logistics systems to track and fulfill orders.
So, what happens when one of those systems goes down?
For many companies, the result is lost income, even if their own systems are running smoothly.
Third-Party Dependency Is Now a Core Enterprise Risk
Across industries, the data paints a clear picture: cyber risk no longer lives within a single network or organization.
The World Economic Forum’s Global Cybersecurity Outlook 2025 reports that 45% of companies expect a significant cyberattack on their supply chain by year’s end, and more than half cite third-party dependency as their greatest challenge to cyber resilience.
Similarly, Aon’s 2025 Global Risk Management Survey identifies business interruption as the second-highest enterprise risk globally, underscoring how deeply operational continuity now depends on vendor stability and data connectivity.
These insights highlight that in the modern economy, a company’s risk posture is only as strong as the partners and platforms it relies on.
The Overlooked Coverage: Contingent Business Interruption
Most business leaders understand the basics of business interruption insurance. If a covered event halts your operations, it helps replace lost income. However, there’s a critical extension that few consider: contingent business interruption (CBI). This coverage protects you when a disruption happens to someone else.
In cyber insurance, that means if a third-party vendor, cloud provider, or technology partner suffers a breach or outage that prevents you from operating, your lost income may be covered.
If your business model is in any way contingent on someone else’s operation (like a distributor, logistics partner, POS vendor, cloud platform, e-commerce gateway), then your revenue is at risk from a third-party cyber or technology event. And if that loss is uninsured or inadequately insured, it can erode margins, damage customer relationships, and create major financial stress.
By proactively reviewing and ensuring this coverage is embedded and understood, you gain two benefits:
- Operational resilience — Ensuring that a partner’s failure doesn’t turn into a financial crisis for you.
- Strategic peace of mind — Knowing that one of the more hidden cyber risks is addressed before it becomes a surprise.
Why Coverage Gaps Happen
Even companies that carry a robust cyber policy are sometimes surprised to learn that contingent business interruption isn’t automatically included. It’s often buried in sub-limits or requires specific triggers to apply.
A proactive broker will look closely at:
- Whether contingent business interruption is included or excluded.
- What types of vendor events (cyberattack, system failure, cloud outage) trigger the coverage.
- The policy’s waiting period before income loss coverage applies.
- Whether limits reflect the real financial impact of a third-party outage.
Too often, these conversations occur after a loss, rather than before.
The CCIG Approach: Ask Now, Not After
Cyber risk is no longer only about what happens inside your firewall; it’s also about what happens outside it.
Contingent business interruption exposure is real, changing quickly, and increasingly material in large cyber claims. If your cyber program does not explicitly cover vendor and supply‐chain outages and their impact on your income, you need to revisit your coverage strategy.
At CCIG, we help organizations think beyond the obvious to identify hidden exposures and align coverage to real-world operations. Our cyber risk specialists combine deep technical insight with proactive claims experience to design programs that perform when it matters most.
Reach out to our team if you have any questions about your strategy.
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