Globalisation… risky business?
Globalisation has brought about many benefits to global economic stakeholders, and amongst them, is the possibility of trade between countries, regional blocks and continents. With this development, risk managers and operations managers are faced with a somewhat difficult task of being exposed to risks which the company has no control over.
With the increasing trend in foreign trade amongst international companies, an incident in Europe may affect operations and the ability to supply to an African country and in turn, if there is a catastrophe in Australia, it affects their ability to buy from the African operations.
Supply chains are an important part of any business process. It is the phases through which a product or service goes through, until it reaches the final user or customer.
Of greater importance is knowing the functions at each and every stage of the chain in order to better plan one’s business operations. For any business, on one end it will include its suppliers and on the other end customers. These are both parts of the chain that are critical to any business’s success.
A BI claim follows a MD claim
Material Damage (MD) claims are relatively straightforward to settle as it is mostly based on the policy schedule covers, and the policy wording and any endorsements to both. The loss of income or profits, however, is another story. How about the loss of income as a result of incidents that a company absolutely has no control over?
Ever imagine the loss of profits to a company as a result of a loss at another company’s premises? If a supplier or customer has a loss on their property that halts or affects their operations adversely, it is likely to affect the other business as well. It is important to note that a Business Interruption (BI) claim follows a MD claim.
It is for this reason that the insurance industry has CBI cover. It is an extension to the normal BI cover that covers loss of profits following an insured peril (event). Contingent business interruption is cover for the interruption of an insured’s business as a result of what happens at either the customer or supplier’s premises.
Essentially, it is cover for a business for things that are beyond its control. The insured has an option to name suppliers or customers or cover on an all-encompassing basis for all groups. The latter always proves easiest unless in instances where there are major known partners.
Below are some pointers to take into account together with having CBI cover:
Have a business continuity plan in place;
BI calculation. It is critical to calculate it on the correct basis for accurate figures to avoid underinsurance. With technology there is software/programs to assist with sums insured at either the additions, difference or revenue basis, dependent on the type of business;
Include Sasria cover under the BI section. With the increase in such risks it is important to have this cover in place;
Insure customers/suppliers through CBI as discussed above. Alternatively, a company may insure only the major ones for cost saving (without compromising the intention of the cover);
Have a good knowledge of the supply chain and its implications on the business;
Have risk management or enterprise risk management measures in place and understand possible areas of concern; and
Have alternative markets. It is a fact that not all businesses will be able to have alternative customers and/or suppliers. However whenever possible, it is essential not to put all your eggs in one basket.
With the possibility of being exposed to risks, which the company has no control over, it is important to understand the functions at each and every stage of the chain in order to better plan one’s business operations.
Written by Garrun Group, Accounts Executive, Bukhosi Khumalo - Website: www.garrun-group.co.za
Published in the FANuus Magazine April 2019 edition
Globalisasie het baie voordele tot ekonomiese belanghebbendes teweeggebring, onder andere die moontlikheid van handeldryf tussen lande, streekblokke en kontinente. Met hierdie ontwikkeling word risikobestuurders en operasionele bestuurders gekonfronteer met ‘n iewat moeilike taak van blootgetsel wees aan risiko’s waaroor die maatkappy geen beheer het nie.
Met die stygende neiging in buitelandse handel tussen internasionale maatskappye, mag ‘n insident in Europa die werksaamhede en die vermoë om te verskaf aan ‘n Afrika-land beïnvloed. Andersyds kan dit weer tot gevolg hê dat as daar ‘n katastrofe in Australië is, dit hulle vermoë om van die Afrika-werksaamhede te koop, beïnvloed.
Verskaffingskettings is ‘n belangrike deel van enige besigheidsproses. Dit is die fases waardeur ‘n produk of diens moet gaan totdat dit die finale verbruiker of kliënt bereik.
Van groter belang is kennis van die funksies van elke stadium van die ketting ten einde ‘n mens se besigheidswerksaamhede beter te beplan. Vir enige besigheid sal dit enersyds verskaffers en andersyds kliënte insluit. Hierdie is albei dele van die ketting wat krities is tot enige besigheid se sukses.
‘n BO eis volg ‘n MS eis
Materiële skade (MS) eise is relatief voor-die-handliggend om te skik aangesien dit meerendeels gegrond is op die polisskedule-dekkings, die polisbewoording en enige bygevoegde klousules by albei. Die verlies aan inkomste en winste is egter ‘n ander storie. En wat van verlies aan inkomste as gevolg van die gevolg van ‘n rits insidente waaroor die maatskappy absoluut geen beheer het nie?
Het jy al ooit gedink aan die verlies aan winste as gevolg van ‘n verlies by ‘n ander maatskappy se perseel. As ‘n verskaffer of kliënt ‘n verlies op hulle perseel ly wat hulle werksaamhede negatief beïnvloed, gaan dit noodwendig die ander besigheid ook beïnvloed. Dis belangrik om te merk dat ‘n Besigheidsontwrigtingseis (BO) ‘n Materiële Skade (MS) -eis volg.
Kontengensie Besigiheidsontwrigting (KBO)
Dis vir hierdie rede dat die industrie ‘n KBO-dekking het. Dit is ‘n verlenging van die normale BO-dekking wat verlies aan wins na ‘n versekerde gebeure/gevaar volg. Kontingensie besigheidsontwrigting is die dekking vir die ontwrigting van die versekerde se besigheid as gevolg van die gevolg van wat gebeur hetsy by die kliënt se perseel of die verskaffer se perseel.
Ten diepste is dit dekking vir ‘n besigheid vir dinge wat buite sy beheer is. Die versekerde het die opsie om verskaffers te noem of om dekking oor ‘n allesomvattende basis vir alle groepe te kry. Laasgenoemde is altyd die maklikste tensy daar omstandighede is waar daar groot bekende vennote is.
Hier onder is sommige van die punte wat in ag geneem moet word, tesame met ‘n KBO-dekking:
Sorg dat jy ‘n besigheidskontinuïteitsplan in werking het;
BO berekening. Dit is krities om die korrekte basis vir akkurate syfers te bereken ten einde onderversekering te vermy. Met tegnologie is daar sagteware/programme om jou by te staan met die bedrae wat verseker is, hetsy dit by die byvoegings, verskil of inkomste-basis is, afhangende van die tipe besigheid;
Voeg Sasria-dekking by, onder die BO afdeling. Met die styging van sulke risiko’s is dit belangrik om hierdie tipe dekking in plek te hê;
Verseker kliënte/verskaffers deur middel van KBO soos hierbo genoem. Alternatiewelik mag ‘n maatskappy net die belangrikste dele verseker ter wille van kostebesparing (sonder om die bedoeling van die dekking te kompromitteer);
Jy moet ‘n goeie kennis hê van die verskaffingsketting en sy implikasies ten opsigte van die besigheid;
Sorg dat daar risikobestuur of ondernemings-risikobestuurmaatreëls in plek is en verstaan die moontlike areas van kommer; en
Sorg dat jy alternatiewe markte het. Dis ‘n feit dat nie alle besighede in staat sal wees om alternatiewe kliënte of verskaffers te hê nie. Maar, indien moontlik, is dit noodsaaklik om nie al jou eiers in een mandjie te plaas nie.
Met die moontlikheid om aan risiko’s blootgestel te word, waaroor die maatskappy geen beheer het nie, is dit belangrik om die funksies by elke stadium van die ketting te verstaan ten einde ‘n beter plan van jou besigheidswerksamhede te hê.
Rekeninge Uitvoerende Beampte
Garrun Johannesburg (Eiend.) Beperk