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2015 has seen hugely contrasting challenges to businesses. Terrorism continues to be high on the Boardroom agenda with the UK alert ranked as ‘highly likely’. An attack could affect businesses by impacting supply chains and business continuity, as well as office locations and staff safety.

Supply chains

Strengthening your weak links

With the global marketplace resulting in far-reaching supply chains, any interruption in the route can have deeply damaging effects.

It is surprising to learn then, that only 11% of UK businesses currently have strong relationships with suppliers at all stages of their supply chain*.

Yet without having a deep understanding of who you are working with, how can you foresee and mitigate problems?

The research by CIPS (the Chartered Institute for Procurement & Supply) also highlighted that a staggering 66% of UK supply chain professionals said they lacked a risk mitigation strategy in the event of a supply chain crisis.

These two statistics alone are incredibly concerning and could have very serious consequences. The good news is that both issues are easy to remedy.

Where relationships are concerned, it’s a simple case of opening proactive, dedicated channels of communication, using technology to ensure transparency.

You should also consider introducing a Supplier Code of Conduct to ensure all links uphold the same standards.

And remember that the relationship is twoway – they could assist in developing risk mitigation plans as they will have greater knowledge of their own risks.

Indeed, the CIPS research showed that those with close supplier relationships up to tier three and beyond were 1.5 times more likely to have avoided a major supply chain crisis in the past 12 months.

This kind of knowledge and control is clearly invaluable, especially in the ever challenging and competitive economic landscape: it enables efficiencies and avoidance of disruption.

Risk mitigation strategies are something that you can develop in-house, once you have knowledge of your existing insurance cover and comprehensive data for your supply chain.

This can vary from understanding different types of risk such as geographical, material, political, environmental and so on, all feeding into a risk register. Once you know the risks, you can put mitigation plans into place.

If you don’t have the expertise in-house, or just feel you would benefit from an expert’s view, our in-house team of Risk Management professionals would be only too happy to help with an independent audit – it’s all part of the Griffiths & Armour service.

*CIPS, May 2015

A state of preparedness

The impact of terrorism on UK businesses

The UK is on the highest terror alert since the London 7/7 bombings a decade ago, with MI5 anticipating that an attack on home soil is ‘highly likely’.

Subsequently, terrorism insurance cover with wider policy wordings has been developed and more insurers than ever are employing specialist terrorism teams to evaluate risk for every aspect of business.

And while the greatest risk to business is still posed overseas, particularly if you have supply chains in volatile regions, there is a heightened UK risk alert with British radicals being incited to perform acts of terror on home soil. It is imperative to re-evaluable your exposures.

Could your distribution centres be targeted? Do you have assets near famous landmarks? Do you have high profile clients or military, royal, political or religious associations?

And with the increased availability of terrorism cover, there is a greater risk that companies will take on insurance without really understanding what they have.

Cover for key exposures can now be purchased individually, but this is a much more complex area than you may at first think. For example, if a package enters your distribution centre containing a biological weapon, does your terrorism policy protect you?

Just because you have bought terrorism cover, you can’t assume it does. The reality could be starkly different, as most stand-alone terrorism policies outside of Pool Re specifically exclude biological attacks – this has to be bought separately.

And remember, insurance doesn’t remove the risk – it’s simply a mitigation tool. In this unpredictable world, you still need to have informed risk management in place and responsive plans ready to go should the unthinkable happen.

To find out more, email coverstory@griffithsandarmour.com.

The construction skills gap

With the construction industry under pressure following the recession and current housing crisis, the shortage of skilled workers is compounding these issues even further. Indeed, recent research* showed that lack of skilled labour is the biggest challenge for 53% of construction firms and over half believed the shortage will become even more problematic in the coming five years. The shortfall is causing difficulties in managing projects for 77% of professionals, resulting in delays, increased customer dissatisfaction and broken contracts. Business Interruption cover is an option that can be offered to many construction companies to mitigate some of these issues, while firms themselves can help to manage the risk of skilled labour shortages by taking on more apprentices and employing workers from abroad. To discuss how your insurance can help manage the risk of Business Interruption, speak to your Griffiths & Armour contact today.

*Zurich, August 2015

The rise of cyclist

Making sure you’re up to speed

Health and wellness is a hot topic both at home and in the office. And with greater volumes of traffic on the roads resulting in longer, more stressful journeys, cycling is ever more enticing.

With the current increase of people taking to the roads on two wheels, comes a major risk for businesses to consider, especially in built up areas: road safety proficiency of employees who drive for their job.

The importance of ensuring your drivers have enough breaks and are sufficiently experienced is nothing new. It’s what happens with a claim after an incident where many companies still need assistance.

Where does liability lie for a road accident at work where the driver was at fault? With the driver personally, or with the business?

In these cases, it’s imperative that the business can show they have correctly checked their drivers’ qualifications; provided proper training; and allowed sufficient breaks and rests between shifts.

If the driver can prove that any one of those hasn’t been fulfilled, liability lies with the company. A charge of Corporate Manslaughter is a very real possibility, although it is as yet an untested area for someone driving for work, instead often being prosecuted under Health and Safety legislation.

Companies need to ensure that these incidents are covered in their insurance cover, should they ever occur.

Without sufficient evidence of any of the above, companies can face costly law suits, as well as damage to reputation. If you need advice on risk management, driver training, or a free assessment of your insurance cover, please contact us.