Business interruption can occur in many forms. The change in the seasons often sees some businesses booming, whilst others experience a low period before ramping up activity levels for later in the year. For example, a fashion company may well have some products that see no seasonality in their income. But the business might rely on sales peaking to coincide with seasonal changes, where the vast majority of income is achieved. An incident affecting their non-seasonal stock could have minimal effect on the business.
However, if a whole summer’s stock was lost, it could be catastrophic and cause business interruption. Companies who outsource much of their manufacturing are particularly exposed to such risk. The stock for the summer season may arrive in relatively few shipments and if the stock is lost, there will be little prospect of the suppliers having the time or capacity to manufacture replacements. It could see the business lose the majority of the income, but it could also see an impact on their ability to get shelf space with customers next summer, as the space has been taken by a competitor.
- De Novo Risk Solutions is a specialist Risk and Insurance Broker based in Malvern, Worcestershire. We provide professional and expert advice to a number of industry sectors. Call us on 01684 218618 or e-mail us for your free quote.