The first non-physical all risks supplier cover for supply chain has been bound by Zurich Global Corporate. A global information technology firm has become the first to purchase.

Nick Wildgoose, supply chain proposition manager, Zurich Global Corporate commented, “The impact of a supply chain disruption has the potential to cause severe damage to a company’s balance sheet, valuation and brand reputation. Zurich’s proposition provides a market leading combination of risk assessment and mitigation advice, broad risk coverage and support to help minimise that damage.”

Zurich Global Corporate has developed a risk assessment framework which comprises a checklist of approximately 23 risks that it would consider in connection with a company’s supply chain This assesses two broad areas of a business (exposures and controls) and includes the following;

Exposures:
•Geographic exposures - What are the supplier level exposures that
arise for reasons of geography? (in addition to industry/supply specific exposures)?
•Economic exposures - What are the supplier level exposures that
are affected by current or changing economic conditions (in addition to industry/supply specific exposures)?
•Political exposures - What are the supplier level exposures that
are affected by current or changing political conditions (in addition to industry/supply specific exposures)?
•Structural exposures - What are the exposures that arise as a
result of the supplier’s supply chain structure (in addition to industry/supply specific exposures)?

Controls (a series of internal and risk management controls including):
•Supplier selection management -To what extent are supply risks
assessed as part of the sourcing strategy and supplier selection processes?
•Commercial Contract Management - How well does the company manage
the commercial / contractual arrangements with its suppliers?
•Business Continuity Management - How well prepared is the customer
for unforeseen business disruptions?
•Relationship - How well-managed and well-developed is the
relationship with the supplier? How well does the supplier manage its own supply chain?
•Supplier’s security of supply - How well does the supplier manage
its own supply chain?

David Martin, head of customer & distribution management, Zurich Global Corporate added: “Supply chain exposures are seen regularly in risk surveys as being one of the top three risks that our customers face and we are actively developing a proposition that tackles these. The interest continues to grow among a number of our customers who recognise that strong supply chains are vital to maintain their global competitiveness and that taking active steps to protect them is key to their success and safeguarding critical business outcomes.”

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