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Supply Chain Issues Create a New Coverage Battleground

Law360 Insurance Authority

As companies around the globe experience supply chain issues, some can turn to their insurance policies for limited coverage, but experts foresee increased underwriting scrutiny and an uptick in litigation from policyholders trying to recover losses they've incurred due to supply disruptions.


That could drive interest in standalone supply chain coverage, said John Gibbons, a partner at Blank Rome LLP and vice chair of the firm's insurance recovery group.

In supply chain disruption coverage, the breadth of these nonstandard policies varies substantially and can include cover for everything from strikes, commotions, labor shortages, other labor issues, port closures, political risks, warlord activity and more, depending on the aspect of coverage the policyholder is purchasing, he said.

However, making a supply chain interruption claim can be challenging because the root of the problem must be identified, Gibbons said.

"That can be everything from what's been identified as transportation problems across the globe to political issues happening to government orders and restrictions," he said.

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“Supply Chain Issues Create a New Coverage Battleground,” by Angela Childers was published in Law360 Insurance Authority on October 29, 2021.