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NDBI: the missing piece of your business interruption insurance?

An excellent article that explains the “scale and scope” related-shortcomings of the frameworks and methods used to manage risk in an organization’s supply chains.

Here are a few additional thoughts:
Two points.  The lack of “complete” coverage (beyond the scope of physical triggers and assets) reflects the bigger issue of how many organizations neglect to address risk in their supply chains. One of the reasons for this gap is due to the functional nature of organizations and the lack of ownership of these issues across entire supply chains. Today, the scope of most supply chain risk work is limited to sourcing and procurement. The second challenge is what I refer to as the complex sale. When we (while I was at Marsh) developed this type of coverage back in 2008 we found that few organizations were willing to do the upfront “insurance” assessments across multiple functions (again, partly because of the previously stated reasons. However, organizations that were willing to step up to the broader challenge preferred a much more detailed analysis, driven by value (products that drove profitability). Ultimately, we’d get back to “now what”, i.e. what to do to mitigate the risks, and the value of having the scope of NDBI coverage was welcomed.

 

 

By Gary S Lynch

I am the Founder and CEO of The Risk Project, LLC a risk, uncertainty and opportunity advisory firm. As a management consultant, business developer and market analyst at Booz Allen Hamilton, Gartner Group and Marsh, I was responsible for defining market strategy, commericalizing capabilities, and developing businesses. I've helped dozens of organizations create new revenue streams. I've also held the position of Risk Executive, CISO and Global Leader - Office of Business Continuity at JPMorganChase, Prudential and Prudential Securities.

Throughout my career I worked with senior leadership from startups, academia and government agencies to life sciences, hi-tech and financial institutions. I was a founding member of the US Dept of Commerce's Advisory Committee on Supply Chain Competitiveness, Advisor to the WEF Global Risk Network and Sr. Research Fellow at the RH Smith School of Business, University of Maryland.

I've authored three business risk books and been a featured at the WEF, APEC, WCO, NIST, NACD, AIAG, RIMS, MIT CTL, Robert H. Smith School and the Desautels School of Management/McGill University.

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