Supply Chain Disruption Insurance

No. BI Insurance typically covers Losses due to localized physical damage (e.g., your factory burns down). Supply Chain Disruption Insurance is much broader; it specifically covers operational Losses caused by systemic external shocks, such as geopolitical conflicts, major port closures, or international trade sanctions, which are not localized to your physical premises.

You must quantify revenue Loss (lost sales), fixed cost overrun (paying staff/rent during downtime), and recovery costs (emergency sourcing/retooling). A comprehensive metric is 'Daily Revenue Contribution' multiplied by the estimated duration of the shock, plus all incurred costs.

Absolutely not. While the policies are complex, the risk is universal. Even an SME relying on just a few specialized, global suppliers is vulnerable. Implementing basic dependency mapping costs far less than surviving a single global shock.

Force Majeure is often a contractual clause that excuses performance when extraordinary events occur (like a hurricane). Supply Chain Disruption Insurance is a financial product that *covers the economic Losses* resulting from those excused performance events, providing the necessary liquidity to keep the lights on and paying the bills.

You should perform a full audit and update your policy parameters at least every 18 to 24 months. However, you must perform a 'mini-audit' whenever there is a major geopolitical shift, a new tariff is implemented, or you onboard a major new international supplier.