Business Interrupted 
In the wake of COVID-19 the world is returning to ‘business as usual’. However, in doing so global firms appear to be taking their eye off the ball when it comes to business interruption risk.
Our Risk & Resilience research of 3,500 global business leaders1 reveals that concern about the impact of business interruption has dropped from its zenith in 2021[i], when 22% of business leaders surveyed cited it as their leading business risk, to just 17% ranking it as their top risk today[ii]. To a degree this drop in concern can be attributed to the fact there is no longer one peril to focus minds.
Today, businesses must contend with a range of accelerating threats from extreme weather events, cyber-attacks and outages to global geopolitical and economic shifts.
Yet, despite the lessons learned from the pandemic’s seismic shock to global commerce, a quarter of business leaders continue to feel unprepared[iii] for business interruption risk, which includes the inability to access business premises or to trade as usual.
Amidst the age of global supply chains, businesses are increasingly interdependent. Even simple manufacturing errors or omissions can have significant knock-on effects for businesses further along the supply chain.
Concern about business interruption events and supply chain disruption is climbing the global manufacturers’ risk radars – with 16% ranking business interruption as their top business risk now, rising to 21% by 2025. Concern about supply chain remains broadly steady with 19% ranking this their top risk, and 18% predicting it will remain top of their risk concerns in 2025.
Manufacturing errors can take a number of different forms, including errors in design, production and distribution. The loss of revenue these errors can cause, combined with the cost of replacing or updating the goods, can place a significant financial burden on businesses.
With the rise of offshoring and increasingly complex supply chains, it can be difficult for businesses to pinpoint where exactly in the chain the error occurred and secure compensation.
Alex Marti
Focus Group Leader - US Product Recall
Florian Beerli, Head of Specialities & US Programs and Focus Group Leader – Product Recall
We are also seeing the increased frequency of political and social activism and strikes, riots and civil commotion (SRCC) leading to business interruption as firms are caught in the crossfire of polarising debates, terror attacks or other acts of violence.
Businesses are finding themselves unable to access premises if they are in close proximity to an incident, sometimes denied entry for weeks whilst incident research or clean-up is undertaken.
It is vital that business leaders do not underestimate the threat of business interruption risks and aren’t lulled into a false belief that they will bounce back quickly. While the constant firefighting in recent years has made many businesses feel more resilient to unexpected shocks, it is important to maintain a proactive approach to risk management, ensuring crisis and business continuity plans are up to date and fail safes and tailored insurance are in place.
[1] beazley.com/en-US/news-and-events/spotlight-on-boardroom-risk-2024/methodology/
[2] ESA - Devastating floods in Spain witnessed by satellites
[3] https://www.techtarget.com/whatis/feature/Explaining-the-largest-IT-outage-in-history-and-whats-next
[i] In 2021 the survey was undertaken with 1,000 respondents based in the UK and US only.
[ii] This year’s survey was undertaken between 05.01.2024 and 17.01.2024 with 3,500 executives based in the UK, US, Canada, Singapore, France, Germany and Spain of varying sizes, operating in 9 broad industry sectors with international operations.
[iii] ‘Not very well’ and ‘not at all’ prepared answers combined.
