Supply Chain Insurance May Help Manage Supply Chain Risk

Reading Spend Matters blog article Call Your Broker: Have You Purchased Supply Risk Insurance Yet? we were introduced to an interesting concept - Supply Chain Insurance.

Marsh, the world's leading insurance broker and risk advisor, will be offering the product. According to Marsh's website:

"As businesses in nearly all industry sectors take advantage of globalization to reduce costs and achieve efficiencies, their supply chains have become the lifeblood of many of their production, manufacturing and distribution activities," said Robert Howe, Leader of Marsh's Global Property Practice. "While the economic benefits of such supply networks are clear, the risks have become more acute and a supply chain interruption can have potentially devastating effects on a business. Our new program approaches business interruption on a broad basis to help companies address a wide range of potential disruptions."

You may ask, "how would an insurance company decide on a premium for a supply chain risk?" Apparently there is some science involved as you would expect from such a large insurance organization.

For businesses interested in the program, the first step in obtaining the coverage is to have Marsh's Risk Consulting Practice conduct a comprehensive supply chain risk assessment. Lexington Insurance Company will then use the assessment to underwrite the risk.

Has anyone yet contacted Marsh about this? We'd love to hear your feedback.