Supply chain dependencies and product recall risks possibly sum up the new challenges for manufacturing, distribution and wholesaling businesses. Supply chain management from an insurance angle is a narrow and potentially difficult area. Insurers will often volunteer cover for suppliers’ risks, whilst failing to make it clear that they are only offering limited peril protection with caps on any claim, usually under the Business Interruption heading where you need it most.
A feature of the insurance for specialist exposures – such as recall and supply-chain – is the increasing need for structured risk presentations. Manufacturers and distributors will need to exercise more interest in the risk placement process for these new risks, extending of course to areas such as cyber for those with a data breach or media exposure in particular.
Sometimes supply-chain risks (the potential for disruption as result of an external rather than trading risk) require more than one insurance market to reach an acceptable level of cover.