Jill Dalton, partner at consulting firm Dempsey Partners, said a confluence of factors—namely the economy, outsourcing, and weather and other types of loss events—have created a perfect storm to drive up risks associated with complex supply chains, as well as the need for products to cover them. Coverage is available but inconsistent, she said, and limits are low. Losses are difficult to quantify: What happened at a supplier? What was the peril? Was the policy triggered? 

The supply chain/CBI solutions in the marketplace are not being bought by clients, according to Duncan Ellis, managing director and U.S. property practice leader for Marsh. He called the take-up rate “disastrous”—as in only a handful of contracts have been signed by one leading insurer, for example. 

David Shluger, strategic risk consultant at Zurich, said the industry's current role as a strategic risk consultant is working, and clients are happy with assessments provided, outlining the risks along the supply chain and advising on matters such as locations of distributors—but potential clients will take the plans on how to mitigate losses and put them into action without buying a risk-transfer product. 

Dalton adds supply-chain and CBI products are in an evolutionary state, just as employment practice liability was when it was first introduced to the marketplace. No one bought EPLI coverage at the start, but it is now popular. The future of supply chain products “will get better,” she added.