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2. The loss or damage is caused by a covered cause of loss, and3. The loss results in a suspension of operations at a covered location. 30Contingent business interruption insurance is typically provided for the reasonableamount of time it takes the dependent property to repair their damage and resumenormal operations. 31As with an underlying property insurance policy, catastrophicevents such as earthquakes or flood losses typically are not covered under a contingentbusiness interruption policy. 32As a result, businesses need to specifically request andpurchase this type of coverage. 333. Alternative Risk TransfersIn the area of catastrophic losses, insurance can be problematic because catastrophesare low frequency but high severity events. Premium pricing incorporates a substantialrisk premium. Therefore, insurance can be expensive and not economically feasible forsome businesses. As a result, the insurance and financial markets have developedalternatives to traditional risk management techniques and insurance in order to makethe pricing of catastrophic risks more efficient. 34For example, contingent capitalstructures are contractual agreements that provide an infusion of capital in the event ofa catastrophic loss. 35These contingent capital contracts provide capital at a30 Id.31 Id.32 Id. at 2.33 Id.34 ROBERT J. RHEE, INSURANCE ALTERNATIVE RISK TRANSFER 4.35 Id.March 5, 2015 13 @ 3-5-2015 ALFA International6427256.3/SP/00009/0099/011215