In today’s world, many companies operate on the basis that their raw materials are purchased and processed on an as and when basis to reduce their overhead costs in having to hold large amounts of stock. They rely on other companies, outside of their control, to keep them supplied with the materials they need to keep operating. In view of this, it is worth reviewing and understanding the supply network that is being used to ensure that your tier 1 suppliers have the capability to respond to demand required, even if perhaps their suppliers are unable to meet this demand due to an insured loss at their premises.
A Business can not only be interrupted by a loss at its own premises as a consequence of property damage, but can be equally interrupted following a failure in its supply chain.
We work with our clients to review their Business Interruption risk so that we can gain a better understanding of the risks involved in their supply chain, always with a view to reduce this exposure via a risk management approach. We also tailor our clients insurance arrangements to take this risk in to consideration, to ensure that their cover not only provides indemnity for their tier 1 suppliers in the event of a loss, but also their tier 2 suppliers as well.
By Martin Singleton Dip CII – Account Executive