30 October 2018: As supply chain disruptions become more prevalent in addition to also complex, threatening the survival in addition to also reputation of organizations, businesses should be adequately insured as part of their broader risk mitigation strategies.
Malesela Maupa, Head of Insurer Relationships at FNB Insurance Brokers says supply chain disasters are a global challenge affecting all regions throughout the planet, ranging via severe drought to heavy rain, cyclones in addition to also earthquakes amongst additional potential risks. They have been getting worse over the past few years.
He says the key concern in today’s global marketplace is usually that will more in addition to also more businesses rely on overseas suppliers. For example, if your company’s operations depend on the timely delivery of raw materials, parts or finished products via distant locations, the business could lose income/revenue when these goods are delayed.
A significant downturn in supply often results in increased costs for acquisition of the materials needed to continue operating. that will can also result in partial or complete shutdown of the operation as that will can’t manufacture or supply.
“There are various steps that will can be taken to limit the impact of supply chain disruptions, such as warehousing inventory in addition to also using multiple suppliers when possible. Furthermore, purchasing the extensions under your Business Interruption policy can limit the loss. This particular type of insurance reimburses your business for lost profits in addition to also related costs caused by disruptions in your supply chain even if your company itself has not suffered any damage,” says Maupa.
that will is usually also important to consider that will that will can take approximately two years or more for a company to recover via a supply chain failure. Significant supply chain disruptions can reduce revenue, cut into market share, threaten production in addition to also distribution, inflate costs in addition to also ultimately affect a company’s bottom line. Whether you run a global corporation or a tiny business, you need the proper insurance coverage to protect against supply chain failure.
Supplier’s extension can also help cover losses caused by disruptions at your suppliers’ locations or in line customers. This particular type of insurance is usually limited because that will only provides coverage if the businesses you depend on are disrupted by physical property damage. For instance, if a supplier’s factory is usually damaged by fire or a flood in addition to also ceases to operate.
Your insurer may require your business to identify specific supplier in addition to also customer locations to be covered by the insurance policy. If you change suppliers, fail to update your insurance policy in addition to also then a disruption occurs, you may not have cover.
“In these tough economic times when businesses face a range of unprecedented risks, putting measures in place to safeguard the business against unpredictable supply chain disruptions cannot be overemphasized. Without adequate insurance cover in place your business could be left defenseless,” concludes Maupa.
The post Don’t be caught off-guard by supply chain disruptions appeared first on The Home Of Great South African News.