Contingent BI & Supply Chain Disruption: Expert Witness Guide
Contingent business interruption (CBI) extensions respond when an insured peril impacts a third party on whom the policyholder economically depends. Supply chain litigation increasingly requires experts who can combine dependency mapping with rigorous financial modelling - always mindful that correlation is not causation.
Named vs unnamed CBI: evidence expectations
Named CBI schedules identify specific suppliers or customers, simplifying some coverage questions but imposing strict compliance with declared dependencies. Unnamed CBI broadens the field but demands richer contemporaneous procurement evidence to prove that the disrupted third party was in fact a dependency within the policy meaning.
Experts should narrate the commercial relationship history - contracts, minimum purchase obligations, sole-source approvals - to show why alternative sourcing was impractical or more costly in the specific factual matrix.
Causal chain analysis in tribunal-ready form
A robust CBI opinion isolates the insured peril at the third-party location, traces operational impact on the policyholder, and excludes parallel macro shocks. Where multiple suppliers fail concurrently, the expert may need staged models attributing incremental loss by supplier tier.
| Causal element | Expert question | Typical proof |
|---|---|---|
| Trigger | Did an insured peril occur at the contingent location? | Loss adjuster reports, news, weather data |
| Dependency | Was volume/materially reliant on that counterparty? | ERP bills of materials, contracts |
| Mitigation | Were substitute goods reasonably available? | Procurement RFQs, premium freight invoices |
| Quantum | What incremental GP was lost? | Margin analysis by SKU/service line |
Linking to CPR Part 35 and joint expert process
CBI disputes benefit from early scoping of joint expert agendas: agreed supplier lists, shared data rooms for ERP extracts, and a timetable for sensitivity testing on lead times. Experts must disclose weaknesses in ERP data integrity rather than overstating decimal-level precision unsupported by underlying ledgers.
Related Case Types
Deep-dive overviews with FAQs and structured data for common dispute patterns linked to this guide.
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