Supply Chain Insurance 101
Do you rely on one or more third-party suppliers to produce certain components used in your products? If you do, a disaster that interrupts your supplier’s regular business operations could have a devastating effect on your production abilities. Not only could an interruption harm your own revenue, but it could also negatively affect your customers.
While you should always try to minimize risk through contingency planning and other risk management techniques, as supply chains grow across the globe, sometimes there is little you can do about the exposures faced by your suppliers. Supply Chain Insurance is meant to cover losses you incur as a result of an interruption to your supply chain. Supply Chain Insurance coverage allows you to work confidently with suppliers who face exposures beyond your control.
Supply Chain Insurance Considerations
Supply Chain Insurance Coverage is most important for those who directly rely on the production ability of a key supplier for their own operations. If there are no alternative suppliers available and you cannot build up a substantial reserve of materials, then you are at an increased risk for debilitating interruption and are more likely to benefit from Supply Chain Insurance.
Supply Chain Insurance Covers
In the past, most Supply Chain Insurance policies that covered supply chain interruptions required physical damage to the product or material itself. Recently, however, an increased focus has been put on addressing more diverse causes of loss within the supply chain. Supply Chain Insurance are now available that activate on any number of events that cause an interruption, such as:
• Natural disasters
• Political unrest
Supply Chain Insurance is meant to cover financial losses you incur as a result of an interruption to your supply chain. Such coverage allows you to work confidently with suppliers who face exposures beyond your control. Supply Chain Insurance Policies protect your income during supply shortages, covering revenue loss resulting from reduced output along with other associated costs that you may incur as a result of the interruption.
To learn more about Supply Chain Insurance connect with an ALIGNED Insurance Advocate today at www.alignedinsuranceinc.com