PREVENTING DESTRUCTION SUPPLY CHAINS As the world becomes increasingly interconnected , and the drive for efficiency increases , loss prevention becomes more complicated due to the nature of global supply chains . Now , one event far away can cause operations along the entire supply chain to cease . With this in mind risk to the businesses from the supply chains need to be properly evaluated , and that protection options or alternative supply sources are identified .
These alternatives need to be in locations not susceptible to the same type of weather events . Businesses that have adequate risk prevention practices in place will be in a position to gain an advantage over competitors who do not .
HOW CAN AN INSURER HELP ? Given the variety of risks that extreme weather events can present for businesses , it is clear that insurers should help their policy holders in a number of ways . At a basic level , insurers can compensate for lost income , ensuring that businesses still have the capital available to keep operating and will not be brought to a standstill by an extreme weather event .
Insurers can also go a step further by assisting in the creation of a business continuity plan covering areas such as , disaster recovery , employee safety , retrieval of business data , emergency communications and the possible relocation of a business to a more suitable area . A continuity plan can ensure that a business can resume normal operations quickly , safeguarding market share , reputation and profitability .
Insurers should help clients identify the , ‘ pinch points ’, as well as show which areas aren ’ t covered , to help them create a higher level of resilience within the business , which will mitigate the damage that extreme weather events can cause .
At FM Global we believe that business resilience and the long-term success of an organisation go hand in hand . With this in mind we would always encourage our policy-holders to take a long-term view of their businesses , and to implement risk prevention strategies which increase the resilience of their business . A resilient business can mitigate both the material and reputational damage that extreme weather events cause , ensuring long-term success .
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