Even with the most rigorous supply chain risk management processes in place, sometimes disruption is inevitable.
The importance of insurance in supply chain management, therefore, cannot be overstated.
Principally, protection is provided by business interruption insurance, which provides cover for loss of income as a result of an unexpected incident which means that the business cannot operate as normal (usually arising from damage).
For example, should there be a fire at a supplier’s premises, leading to a loss of critical parts required to keep your manufacturing plant operating, business interruption insurance should be able to help, if critical and dependant suppliers have been noted on the cover.
The policy would aim to restore your business to the same position it was in prior to the loss, while also providing you with the funds to continue business as usual by paying wages, bills and maintaining profits.
Meanwhile, goods in transit, marine/airfreight, and stock throughput insurance are all further ways to protect against supply chain exposure.
Goods in transit covers the movement of goods you are responsible for within the UK, while marine/airfreight insurance normally refers to the overseas movement of goods.
Stock throughput insurance is a useful option to cover stock through the whole supply chain, providing protection from the moment you purchase goods from a supplier, to storage at your own or a third party premises, through to final delivery to the end customer.