Excerpted from Insurance News Net |  June 23, 2012

On-site visits [to verify suppliers' ability to respond to business interruptions] don't always uncover the truth, however. Gary Lynch, head of the supply chain risk management group for insurance broker Marsh's risk consulting practice, says it is not uncommon to find that the company operations that you have vetted aren't their actual operations at all. Some of the suppliers in various countries, he says, will set up temporary warehouses and distribution centers that pose as the primary business facilities. They exist solely to pass the corporate vetting. "Those were just set up during the audit process," said Lynch. "The goods were moved in there for the day and then moved somewhere else."

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