Standard business income coverage responds only to damage at the insured's own described premises. But a business can be shut down by a fire somewhere else, at a supplier it cannot replace or at a store that brings in its customers. Its own building is undamaged, so standard business income does not pay.
Business income from dependent properties fills that gap. It covers a suspension caused by direct physical loss from a covered cause at a location the insured depends on, when that location is named. Three types of dependent location are worth knowing:
Contributing location: supplies materials or services to the insured.
Recipient location: accepts the insured's products or services.
Leader location: attracts customers to the insured's business.
Examples: a furniture maker's only lumber supplier burns down (contributing). A parts maker's single big customer has a fire and stops ordering (recipient). A mall's anchor department store closes after a covered loss, and a small shop's foot traffic falls (leader).