Why Aren't Organizations Spending More on Business Disruption Insurance?

 

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Until around 2011, in the wake of the tsunami in Japan and flooding in Thailand, many organizations did not make attempts to quantify the potential costs of a disruption in their supply chains because they often relied on their insurance to cover their bases. However, nearly 59 percent of those in APQC's survey who said that their supply chains have been affected in the last two years by catastrophes such as extreme weather, natural disasters, and political turmoil have not changed spending on their business disruption insurance.

After organizations awakened to the very real possibilities of such extreme events, why would their decision makers not choose to spend more on their safety net? This article explains the three main reasons.

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