GlossaryEN1 min readUpdated: Jun 23, 2026

Supply Chain Disruption Insurance

When a key supplier fails, a port goes on strike, or a natural disaster blocks transport corridors, the resulting financial losses typically fall outside the scope of standard property insurance.

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Last updated: 23 June 2026Published: 19 June 2025

Source: https://www.allianz-trade.com/en_global/corporate-solutions/insurance-solutions/supply-chain-insurance.html

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Definition & Explanation

When a key supplier fails, a port goes on strike, or a natural disaster blocks transport corridors, the resulting financial losses typically fall outside the scope of standard property insurance. Supply chain disruption insurance fills that gap: it covers business interruption costs, lost profits, and additional expenses for rerouting or restoring operations—even when no direct physical damage to the insured's own assets has occurred. Freight forwarders, manufacturers, and distributors with globally distributed supply chains use this policy to hedge against single-source and single-region concentration risks. Premiums reflect the insured's industry, supply chain complexity, and geographic spread of risk. It differs from conventional business interruption insurance, which requires physical damage at the insured's own premises, and from cargo insurance, which covers physical loss or damage to goods in transit.