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| 1 minute read

Tomorrow’s supply chain - UAW Strike Could Impact Supply Chain for Electronics

sThe United Auto Workers strike in 38 locations in 20 states means automotive manufacturers could face yet another supply chain disruption for electronics supplies as the labor dispute continues (UAW Strike Will Cost Billions Across the Supply Chain, EPS News, Sept. 25, 2023).

Any potential disruption in the supply chain for electronics in the automotive industry, just as any other supply chain disruption, can reduce revenue, cut market share, threaten production and distribution, and inflate costs. The results of a supply chain disruption can have a ripple effect lasting years.

Because typical insurance products, like business owners’ property or general liability insurance, do not respond to supply chain risks, any business that relies on a downturn in supply, a delay or failure in the delivery of raw materials, parts, or finished products, may want to consider purchasing specialty insurance coverages and policies, such as contingent business interruption (CBI) or supply chain insurance, both of which reimburse a business for lost profits and costs caused by supply chain disruptions even if none of your locations has suffered any damage.

CBI is typically available as an endorsement to a property policy (and may be provided as part of standard coverage by some insurers) and can help if the businesses you depend on are disrupted by physical property damage – but it is limited in that protections only cover physical damage caused by a covered peril like fire or flood to a factory on which you rely.

Supply chain insurance may be purchased as a separate policy and provides broader coverage than typical property policy endorsements, including disruptions caused by property damage to suppliers’ or downstream customers’ businesses, and losses caused by several types of events, including labor issues (strikes or shortages), production process problems, industrial accidents, natural disasters, political upheaval, war or civil strife, closure of transportation infrastructure including roads and bridges, public health emergencies, and regulatory action.

Insurance coverage is governed by state law, so it’s important to have your coverage reviewed by an attorney well-versed in coverage issues.

Because typical insurance products do not respond to supply chain risks, businesses may want to consider purchasing specialty insurance policies, such as contingent business interruption or supply chain insurance.


business interruption, contingent business interruption, insurance coverage, tomorrows supply chain, supply chain