In the mobility sector, everything revolves around continuity: delivering, selling, repairing, continuing to work. But what many entrepreneurs in the automotive industry don't realize is that their biggest risk sometimes lies outside their own country's borders. After all, what happens when your foreign supplier's factory comes to a standstill?
The risk that is often underestimated
Many importers and dealerships have business interruption insurance. However, standard policies usually only cover damage within their own business operations. Damage incurred by a foreign partner—such as a manufacturer of vehicles, cranes, or parts—often remains uninsured.
Imagine: a fire in Germany, Italy, or Austria
It sounds like something that could never happen to you, but it happens more often than you might think: a major fire at a factory abroad brings production to a standstill for months.
The consequences for Dutch importers or dealers may be immediately apparent:
- Deliveries will cease: no more vehicles or parts will be arriving.
- Sales come to a standstill: without products, there is nothing to sell.
- The gross margin disappears: revenue is drying up.
- Costs continue to accrue: staff, accommodation, and financing costs continue to be incurred.
- Business continuity is at risk: a problem hundreds of kilometers away can put your business under immediate pressure.
The automotive chain is particularly vulnerable
The chain in the mobility sector is tightly organized: Factory → Importer → Dealer → Customer
If the first link in the chain fails, the entire chain comes to a standstill. Yet most business interruption insurance policies focus exclusively on damage within the company itself. This means that a fire at the supplier's premises does not count, even though this scenario often has the greatest impact.
The solution: co-insure foreign suppliers
The good news? This risk can be insured. With a supplementary clause within the business interruption insurance, the risk of an interruption at a foreign supplier can also be insured.
In concrete terms, this means that coverage is provided for:
“Business interruption due to a disruption in the supply chain as a result of material damage at a supplier.”
Example from a policy: maximumreimbursement: 30% of the insured interest, with a maximum of €2,500,000 per event.
Please note: international differences
The assessment of these types of constructions is based on Dutch law and Dutch policy conditions. International situations and policy agreements may vary depending on the insurer.
Conclusion: look beyond your own premises
A disaster at a foreign supplier can have a direct and significant impact on:
- turnover
- result
- liquidity
- continuity
It is therefore essential for every importer or dealer to assess how dependent you are on foreign suppliers—and whether this risk is adequately insured. Zeker voor Mobiliteit helps you to identify this vulnerability and insure against it. So that your business can continue, even if things go wrong for someone else.
Want to know more or need help?
Entrepreneurs with questions about co-insuring suppliers orbusiness interruption insurance can always contact the RAI Insurance Service or me directly.
Jack de Jong
Account Manager, RAI Insurance Service
jack.de.jong@schoutenzekerheid.nl
06 - 25 56 06 57
