Businesses must put more effort into pre-planning for businessinterruption going into 2013, says a new Zurich report namingsupply-chain disruption as the top risk “blind spot” of theyear. 

The report surveyed 600 of Zurich's global risk engineers whowork to reduce insurance-related and other corporatelosses. 

“As the supply chain gets more global, it starts looking likemore of a spiderweb than a chain,” says Linda Conrad, director ofstrategic business risk management for Zurich in North America.“Companies often underestimate their risk, but historically, 40percent of companies experiencing extended interruption completelygo out of business.”

Conrad suggests organizations map out their supply chain,including first-and second-tier contracted suppliers, and quantifyeach link in the chain by financial stability and even geopoliticalissues in the area where it is located.

“Value is about more than being able to name the lowest or bestprice for a product or service,” she says. “It is also how, in thelong run, it is going to help the organization prevent largerlosses.” 

A November survey from Zurich and the Business ContinuityInstitute found that the leading causes of supply-chain disruptionare unplanned IT or telecom outages, with 52 percent oforganizations surveyed experiencing some or high disruption as aresult. 

Such disruption is also becoming more consequential than it wasin 2011, with 1 in 5 companies having registered a single-incidentloss of more than $161 million in 2012. 

Effectively managing supply-chain continuity is critical notjust because of the immediate costs of disruption but also thelonger-term consequences to stakeholder confidence and reputationaldamage, says Zurich, and it should be thought of as part ofeveryday operations—not as an emergency escape route.