Dependent Properties Time Element Coverage
Published: October 29, 2026 · Last reviewed: October 29, 2026 · Est. reading time 5 minutes
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In plain language: Dependent properties time element coverage pays a business's lost income and extra costs when a fire or storm damages a supplier, customer, or neighbor it relies on.
Technical definition: Dependent properties time element coverage is time element insurance, added by commercial property endorsement, that pays business income or extra expense loss from a covered cause of loss at others' premises the insured depends on.
Dependent Properties Time Element Coverage at a Glance
| Attribute | Detail |
|---|---|
| Also known as | Contingent business interruption; business income from dependent properties |
| Related forms or endorsements | CP 15 08; CP 15 09; CP 15 34 |
| Common solution | Scheduled dependent locations |
Key Takeaways
- Dependent properties time element coverage pays when damage at another company's property shuts down the insured's operations.
- Agencies need it in supply chain reviews, because a standard business income form responds only to damage at the insured's own premises.
- A common pitfall is assuming any supplier slowdown qualifies, when the dependent property must suffer direct physical damage.
- A quick win is asking each commercial insurance client which partners could cause a loss of income.
What Is Dependent Properties Time Element Coverage in Insurance?
Dependent properties time element coverage protects a business from losses that start at a property operated by a non-related entity. IRMI notes it was previously called contingent time element coverage and lists two types: business income and extra expense.
Standard business interruption insurance covers physical loss or damage at the insured's location. Damage at a dependent property creates an indirect business income loss, a dependent property exposure. ISO endorsements group dependent properties into four categories:
- Contributing locations supply materials or services.
- Recipient locations buy the insured's products or services.
- Manufacturing locations make products for the insured, such as an outside assembly operation.
- Leader locations attract customers, such as anchor stores or entertainment venues.
How Does Dependent Properties Time Element Coverage Work?
- Physical damage. A covered peril damages a scheduled dependent location.
- Operational suspension. Damage at that location forces a suspension of operations at the insured business.
- Restoration measurement. According to Claims Journal, the endorsements define the restoration period the same way the policy forms do, so the main form's waiting period also matters.
- Loss settlement. Carriers pay the actual loss sustained, including continuing operating expenses, up to the dependent property limit.
Claim Examples Involving Dependent Properties Time Element Coverage
Fire at a contract manufacturing facility halts an apparel brand
A fire shuts an apparel company's only contract plant for four months. The brand's Broad Form schedule lists the plant, so it covers lost profits during the interruption. An unlisted plant might qualify only for a small daily miscellaneous locations allowance.
Hurricane damage to a buyer's warehouse under a contract of sale
A hurricane wrecks the warehouse of a food processor's main distributor, and orders stop. The processor's insurance claim depends on whether the distributor appears on the schedule and on the limit selected.
Dependent Properties Time Element Coverage vs. Business Income Coverage: What Is the Difference?
Dependent properties time element coverage responds to damage elsewhere, while direct business income protection responds to damage at the insured's premises. Neither replaces property damage coverage.
| Comparison area | Dependent Properties Time Element Coverage | Direct Business Income |
|---|---|---|
| Primary use case | Supplier, buyer or leader location damage | Damage at the insured's premises |
| Coverage/concept type | Endorsement | Core coverage form |
| Typical exclusions | Electronic data-only losses; utility suppliers | Causes excluded by the policy |
| Common mistakes | Leaving key locations off the schedule | Limits too low for the restoration time |
What Are the Most Common Mistakes With Dependent Properties Time Element Coverage?
- Skipping the supply chain review. A single supplier fire can threaten operational viability if the risk management process misses it.
- Ignoring indirect suppliers. In Millennium Inorganic Chemicals v. National Union, the Fourth Circuit held the policies covered direct suppliers only.
- Forgetting foreign suppliers. Suppliers outside the coverage territory need international coverage through CP 15 01 or CP 15 02.
- Treating utilities as suppliers. The Broad Form does not treat utility providers as suppliers, so outages need off-premises service interruption coverage.
- Misreading the policy provisions. The Limited Form sets a separate limit for each scheduled dependent property, and the extra expense form offers extra expense protection only.
Sources and References
- IRMI. Dependent Properties Time Element Coverage.
- Claims Journal. Coverage Analysis: Sandy and Contingent Business Income Losses.
- Adjusters International. Contingent Dependent Properties Insurance.