Risk managers have historically looked to contingent business interruption (CBI) insurance as a way to mitigate financial risks associated with loss events that affect their suppliers and customers. CBI reimburses insureds for lost profits resulting from an interruption of business at the premises of a customer or supplier. The cause of the interruption—a fire or earthquake, for example—must be from a covered peril and must result in physical damage that inhibits the third party from being able to supply or receive the insured’s goods. 

Emerging supply chain products, although similar, are much broader than CBI and offer additional protections. In addition to physical damage to a supplier or customer, supply chain insurance products also offer insureds protection against both physical and non physical interruptions to their business, such as strikes, riots, ingress/egress, pandemics, and more. Any peril that interrupts a company’s supply chain can be underwritten into the policy. Therefore, supply chain insurance can be significantly broader than CBI, and should be considered by companies with complex logistics or those that rely heavily on select suppliers/vendors.

Marsh’s U.S. Property Practice leader Duncan Ellis shares his views on CBI and supply chain insurance, specifically the differences between the two. He provides real life examples to illustrate the types of coverage.

Name (required)

Email (required)

Website

Enter the code shown above:

Notify me of followup comments via e-mail