Are Businesses Ready for Arising Supply Chain Risks

Having a business has never been harder than in the past 2 years.  Already dealing with various lockdowns the emerging issue will be a lack of stock, especially in the lead-up to Christmas.  Now more than ever businesses need to be mindful of any supply risks that could affect their business.

As anyone who has walked into a Kmart store recently will tell you, COVID-19 has seriously affected the global supply chain.  Sometimes in ways that could not have been imagined.  For example, in the UK a driver shortage has led to armed forces delivering petrol to garages.  Meanwhile, in the US, 200,000 shipping containers remain on ships off the coast of Los Angeles, creating a bottleneck that threatens to overwhelm the port. 

And while globalisation of supply chains has made the issues more acute, it is not just the global supply chain that has been affected.  The domestic supply chain has also been challenged by an increased move from in-store to online purchasing, which is only expected to increase.

At the same time, Australia Post reported a major surge in parcel deliveries, they have also been affected by temporary facility closures and fewer flights available to transport parcels.  Surging demand has resulted in Australia Post’s biggest hiring spree in history and a total of $1B being spent on new facilities, vehicles and technology. The growing pressure on deliveries can increase the potential for product damage, loss or unfulfillment of customers’ expectations.

With so many businesses affected it is more important than ever for companies to develop risk management solutions to deal with both the visible and invisible elements of their supply chain, and commit to managing their relationships with suppliers in a reasonable way so as to mitigate problems.

It’s important to remember that in Australia a person or entity that imports a product is deemed to be the manufacturer and therefore responsible for all damage caused by that product. Public and Products Liability insurance provides cover for claims arising from personal injury or property damage for a breach of duty of care to third parties. Importantly it can also help cover the cost of defending the business against a product-related claim as well as covering the cost of damages awarded if the business is found to be at fault.

Under Berkley Insurance Australia’s SCTP offering, brokers can obtain fully automated standalone Public and Products Liability insurance quotes for over 1,600 manufacturing occupations, within seconds.

Contributor – Kirsty Owens, State Manager SA & National Portfolio Manager SCTP

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Important Notice
Information provided is general only and has been prepared without taking into account any person’s particular objectives, financial situation or needs. Cover under Public and Products Liability insurance is subject to terms, conditions, limits, and exclusions. When making a decision to buy or continue to hold this product, you should review the Policy Wording available here.