Business Interruption Insurance Efficacy: Five Key Issues
Terrorism, supply chain failure, natural catastrophes, and cyber-attacks all have one thing in common: the threat of business interruption.
No one is safe from natural catastrophe events, but the situation is intensified due to the uncertainty around cover provided by traditional policies.
Risk management and risk transfer must work together to make organizations more resilient, as exposure to major disasters and subsequent business interruption increases. Traditional property damage/business interruption policies were never designed to meet the risks faced by organizations today, and the business interruption insurance market has not kept pace with these rapid changes.
Marsh’s report, Business Interruption Insurance Efficacy: Five Key Issues, highlights how the limitations of existing business interruption insurance are resulting in less than optimal coverage for clients, and makes the case for insurance modernization.
According to the report, published by Marsh’s Business Interruption Center of Excellence, there are five core areas in property damage/business interruption policies where improvements are required. These are:
- Insured values.
- Indemnity periods.
- Wide area damage scenarios.
- Supply chain.
- Claims settlement.