Page 40 - Insurance Times July 2024
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Business
Interruption
Beyond Physical
Damage Srivathsan Karanai Margan
Insurance Domain Consultant
Tata Consultancy Services Ltd..
The purpose of NDBI insurance coverage is to offer financial protection to businesses when their
operations are interrupted or suspended due to non-physical loss or damage. Like traditional BI
insurance, NDBI insurance covers a broad range of losses, including loss of income, extra expenses,
loss of property or equipment use, loss of market or reputation, and loss of key employees.
Insuring NDBI including the wide range of perils it covers, complex policy
wording, interconnected risks with other insurance
The purpose of NDBI insurance coverage is to offer financial
protection to businesses when their operations are interrupted coverage, and the challenges involved in assessing losses.
NDBI risks, being intangible in nature, are even more
or suspended due to non-physical loss or damage. Like
complex and difficult to identify, predict, underwrite, price,
traditional BI insurance, NDBI insurance covers a broad range
of losses, including loss of income, extra expenses, loss of or manage. Some of these challenges (see Figure 3) are
outlined below.
property or equipment use, loss of
market or reputation, and loss of key
employees. In the globalized business
environment, just as BI expanded to
include contingent BI, NDBI is also
evolving to encompass contingent NDBI.
Contingent NDBI provides financial
protection to businesses if their
operations are disrupted or suspended
due to non-physical loss or damage to
suppliers, customers, or other third
parties. However, there are significant
challenges in providing protection for
NDBI.
Figure 3: Challenges in insuring NDBI risks.
Challenges in Insuring NDBI
BI insurance is considered complex for several reasons, 1. Difficult to predict and assess: NDBI losses are
36 July 2024 The Insurance Times
