Business insurance report highlights the importance of business interruption coverage
Following the tremendous amount of insurance news involving catastrophic events around the world last year, it is recommended that businesses take this opportunity to learn from the past and make the right coverage decisions to reduce their risk of financial harm in the future.
Marsh has published a report that has shown that the scale of the 2011 catastrophes was greater than what the previous predictions from loss modeling had provided, and has now challenged the standard belief systems regarding the nature of risk as a whole.
Their data showed that, following last year, businesses should take another look at their strategies for risk management, and implement new methods for solidifying their financial and operational strength.
The report was entitled “Lessons Learned from the Catastrophes of 2011” and it looked into the leading five insurance and risk topics that arose from last year’s events, which were:
• Terrorism, Civil commotion, Riot, or Strike
• Denial of access
• Contingent business interruption
• 72-hour insurance notification clauses
• The differences between storm and flood damage
In the report, Marsh explained that last year’s catastrophic events have also put the spotlight on worries regarding the applicability of standard denial of access cover, which is usually for incidents of a short-term nature, only. It also highlighted the increasing importance of critical business interruption (CBI) insurance to businesses, as was illustrated by the failures to the supply chain after the Tsunami in Japan and the floods in Thailand.
According to the global claims practice chairman at Marsh, David Pigot, “While the risks associated with the events of 2011 were largely understood, their sheer scale and complexity, combined with the devastation they caused, were unprecedented.”
He went on to explain that “These events not only exposed weaknesses in the risk strategies of many organizations worldwide, they also challenged the insurance industry to develop policy wordings that are more responsive to this rapidly evolving risk landscape.”
Pigot cautioned businesses to look into every possible opportunity for covering their physical assets, their workers, and their finances. He stated that by using the events of the past to learn for the future, businesses will give themselves the ability to mitigate the impact of losses and to keep their claims to a minimum regardless of what future insurance news may bring.
Article:The lessons business should learn from 2011 catastrophic insurance news
Article Source: Live Insurance News
Author: Marc Christopherson