Case study: Building resilience through business interruption insurance and continuity planning – and reducing expenditure

Our client: A premium homeware and furniture retailer with both high street and online presence. With projected revenues of over £100 million and a growing footprint of retail locations, the business is expanding its physical presence to complement its digital strategy.

Challenge

The business was introduced to Partners& by their private equity investors in order to carry out a review of their insurance and risk management programme.

In particular, the company was facing a new and significant challenge as their existing insurance provider was insisting on installing sprinkler systems in their new warehouse, requiring seven figure capital expenditure.  The private equity team and the business owners were also concerned that their current insurance programme did not adequately address their operational risks exposures, particularly around cyber and business interruption.

Support

Partners& engaged with the business through a comprehensive discovery process. This in-depth review identified gaps in the client’s understanding of risk exposure. The business felt that this was not due to lack of insight, but the lack of explanation of terminology and strategic risk management advice from their previous advisers.

We introduced BCarm, one of our core ecosystem partners, who led a business continuity scoping exercise focused on ‘tolerance for disruption’.

BCarm’s methodology helped the business understand their tolerance for disruption by identifying their critical threshold for customer retention by quantifying risk, assessing supply chain resilience, and understanding the impact of warehouse or website outages.

The business continuity planning process empowered the company’s leadership team to make informed decisions about business interruption insurance cover, particularly around Additional Increased Cost of Working (AICOW).

Perform

Working in collaboration with both our client and our ecosystem partner, we delivered a more appropriate risk management and insurance programme that halved the gross profit sum insured, complemented their significant AICOW cover and was more aligned to their business recovery plan.

In addition, we delivered a reduction in premium of more than 30% and eliminated the need for costly sprinkler installation.

BCarm’s continuity management system is now being implemented, turning resilience into a live, monitored process.