It is often the case that a company may only deal with one or two customers or suppliers without realising the consequences should something catastrophic happen at their premises. The question you need to ask is “how could this affect your business?” Would your business be able to continue trading?
Suppliers and customers can suffer the same problems as your business and this could affect their
ability to produce the goods you rely on. For example, a client who creates bespoke furniture is reliant on a steady source of wood as a raw material to allow them to create their products. Should the wood only come from one main supplier, your business could struggle to get the raw materials it needs. If the supplier suffered a fire at their premises it would affect their ability to supply any wood.
Cover against such events is available. This is added as a ‘Business Interruption Extension’ and allows you to specify your main suppliers and/or customers by name.
Specifying your customer/supplier may not be necessary for you. An automatic extension is often added under Business Interruption insurance for Unspecified Suppliers and Unspecified Customers which may meet your requirements. This cover is generally restricted in terms of liability and location. It will generally apply at the Insured’s suppliers/ customer’s premises providing they are in the United Kingdom, Channel Islands or Isle of Man. There is also a maximum limit of indemnity usually applied, which varies between insurers.
By Molly White Cert CII – Commercial Account Handler