CASE STUDY

The first step in making sure that your insurance cover protects assets/revenue/profits accordingly is to make sure declared values are properly calculated and stated. Further to protecting the assets/revenue/profits accordingly through the proper declaration of declared values, when an insured looks to protect its business it has to look at its critical components and how an event will affect these components as well as the business as a whole. Without proper coverage for these critical components, recovery from an insured peril could be in question.

A business interruption analysis expands the declared value review to review specific loss scenarios and ensures that cover is in place to respond accordingly to these scenarios. Policy wording, mitigation measures, sub-limits of cover, endorsements and interdependency issues are all considered, analysed, reviewed and reported during a business interruption review. Alliance Consulting will work with operations, finance and management to understand the business and related loss scenarios; review and analyse mitigation strategies; develop a user friendly loss model utilising revisable parameters that calculates the potential loss based on the scenarios; review policy wording and suggest applicable updates to cover the loss scenarios; implement any strategies agreed as a result of the business interruption analysis.

A business interruption analysis would comprise detailed procedures including:
agreement of the scope of the project;
operations, locations and number of loss scenarios to review;
work with management to define the most probable loss scenarios and the maximum foreseeable loss scenarios;
prepare a financial model to calculate the declared values and loss analysis;
summarize, present and discuss the results with the insured, broker and insurer.