What is Trade Disruption Insurance?
Trade Disruption Insurance covers the financial consequences - loss of business income and profits, as well as the incurrence of extraordinary, unplanned expenses - when a company's 'Supply Chain' is disrupted and/or interrupted beyond your control.
Such disruption is caused by several risk events and perils, including
Political Events - including embargo or terrorism,
Physical Events - such as closure of navigable waterway,
Natural Events - including windstorm and other similar perils,
Commercial Events - including bankruptcy of a key supplier.
Normal Business Interruption insurance does not cover these loss perils
Hurricane Katrina's devastation closed the Port of New Orleans. Ships carrying merchandise destined for manufacturers and/or wholesale and retail markets were sequestered, resulting in late shipments and causing loss of profits, delivery penalties and extra expenses to divert cargo onward from New Orleans. Trade Disruption Insurance would protect your company against such lost income/profits and extra expenses needed to correct the Supply Chain for on-time delivery.
While your business may be covered for cargo loss or damage, you are probably not covered for the damage caused to your business by delayed or disrupted delivery of raw materials, semi-finished good or finished merchandise. The added costs to alter your Supply Chain and distribution, along with income lost when supply contracts are not fulfilled on time are insured under these TDI policies, each one customized to each policy holder.
Benefits of Trade Disruption Insurance
- Secures Supply Chain dependent income.
- Avoidance of extraordinary, unplanned expenses to correct the Supply Chain when the perils materialize unexpectedly.
- Inventory risks are transferred to financially strong insurers.
- Customers become confident by your ability to deliver on supply commitments.
- Income stream is confirmed protecting lenders and capital partners.