Risk Tip: Strategy to identifying business interruption exposures
Use flow charts to identify sole source suppliers or other contingent business interruption exposures
Comment: Assessing business income exposures is not always easy. So consider how helpful it would be to draw a map or create a chart of how goods and services flow. That way you can visualize your supply chain. Ask yourself, what in the chain could cause an interruption? If there were an interruption in that chain how long could it last? What would be the worst case scenario? What if there is no physical loss to the building? How much coverage is enough? Is there a plan to replace the flow if the original gets interrupted? Sometimes simple solutions can mitigate big exposures, but it all starts with asking the right questions and an assessment of your situation.
Bottom Line: Business Interruption Insurance is to a business as Disability Insurance is to us personally. If we get sick and are unable to work there is a good chance that our income will stop and our households will suffer. Same thing with a business, if it suffers a loss (gets sick) there is a good chance that the businesses income will be affected and the business will suffer — to the point were it may not survive. Spend the time to review your organizations exposures.