Supply Chain insurance is designed to help reduce the number of supply chain failures and provide cover in the event of an incident whereby supplies are not delivered or are otherwise delayed resulting in a financial impact on a company's operations. It is an all risks cover, focusing on incidents outside of the insured's control, including disruptions related to both physical and non-physical damage, through to the lower tiers of the supply chain.
“Many organisations are not aware who their key suppliers are, especially in the lower levels of the supply chain, and very few have visibility over their entire supply chain. Half of supply chain disruptions occur beyond the preliminary supplier of goods, therefore making it extremely difficult to establish where an organisation lies within its suppliers' priorities,” said Hassan Karim, technical underwriting manager, Zurich Asia Pacific.
“Effective supply chain risk management can present significant benefits to businesses and is becoming an increasingly important driver of their profits. Every customer's supply chain is different so we work with them to shape the appropriate solution and offer an individually tailored policy to meet their specific needs,” he added.
There are two components to the proposition - risk assessment and insurance. In the first phase, Zurich risk engineers conduct a comprehensive supply chain risk assessment in order to identify and evaluate customers' exposure to critical risks throughout their supply chain and prioritised mitigation actions are recommended.
The results of this risk assessment together with other sources of data are then used to underwrite and price the risk in the second phase. Claims are managed by the Zurich claims team and supported by specialist third parties where necessary.
Zurich Supply Chain insurance was launched in Europe and North America over six years ago. (KD)
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