Asking the Right Supply Chain Questions

Supply chains come in all shapes and sizes

Today, management of supply chains is important to businesses of all sizes. At Affiliated FM, we understand that supply chains are at the heart of the way in which organizations operate and compete in today's global economy. That's why we work with you to understand your client's supply chain and help them manage the risk through insurance solutions and risk management planning.

A good plan
If your client incurs an interruption to their supply chain, contingent business interruption (CBI) or supply chain coverage provides a level of insurance protection. However, not all coverage is alike. It's important to know whether the coverage addresses loss from primary, secondary, tertiary suppliers and customers ... and beyond. Affiliated FM's CBI coverage addresses a loss at your client's primary suppliers or customers, while supply chain extends that coverage for a loss at your client's secondary suppliers, tertiary suppliers and more. And, if your clients need even more customized CBI coverage with higher limits, we can include specific supplier locations on their policy.

Coverage is one consideration, but what about potential brand damage and loss of market share? Both could be irreparable in a highly competitive market situation. We believe effective planning and mitigation efforts can help your clients minimize a significant impact to their business revenue, in the event a supply chain loss occurs.

Asking the right questions
When we look at supply chain exposures, here are some questions we like to ask:

  • Are any aspects of your business impacted by single-source suppliers or one key customer?
  • Are any aspects of your business impacted by single-source suppliers or key customers impacting 5 percent or more of your revenues?
  • Can these suppliers or key customers be readily replaced with alternates who provide the same pricing, quality, quantity, delivery and revenue stream?
  • What is the time frame to implement these changes, and has a business continuity plan been developed and tested to ensure your plan’s viability?
  • What do you know about the exposures present at your key suppliers and/or customers?
  • What business continuity plans are in place at your key suppliers and customers to help you avoid a significant supply chain disruption?
  • Are there any contingency contracts in place in the event of a supply chain disruption? Have they ever been tested?

The entire chain
Either CBI or supply chain coverage is available in each of Affiliated FM's business interruption forms. Furthermore, we will assist you and your clients in the evaluation of their exposures at suppliers' and customers' facilities. Understanding your clients' exposure as well as the exposures of their key suppliers and customers will enable you to help them make more informed decisions as to how to manage their supply chain risks.

For more information on this coverage and other business interruption needs, please contact your production underwriter or account engineer.
To learn about our supply chain coverage, view the proVision retail training course, accessible from

Note: This information does not constitute, replace or supplement policy language. The liability of Affiliated FM is limited to that contained in its insurance policies.