Page 1 Recording of this session via any media type is strictly prohibited. Page 1 Supply Chain Brain Avoiding Pitfalls of a Contingent Business Interruption Loss

Page 2 Recording of this session via any media type is strictly prohibited. Speakers Frank Huyberts, Manager - Claims Administration, General Motors Allen Melton, Partner, Americas Leader - Insurance Claims Services, EY Brad McCloskey, Senior Manager - Insurance Claims Services, EY

Page 3 Recording of this session via any media type is strictly prohibited. What to Expect After attending this session you should know how to assess supplier risk, proactively manage supply chain risk, and understand coverage and documentation requirements to support a contingent business interruption loss.

Page 4 Recording of this session via any media type is strictly prohibited. Pitfalls to Avoid Lacking knowledge and/or visibility on the complete supply chain Not having full understanding of CBI coverage and its application Assuming systems are set up to capture or maintain documentation that will be needed to support CBI loss

Page 5 Recording of this session via any media type is strictly prohibited. Assess Supplier Risk Number of suppliers o How well do you know and understand your Tier 1 and/or Tier II suppliers Risk profile of key suppliers and potential loss scenarios Specialization of items supplied Geographic dispersion of suppliers Ability to resource parts within a supplier’s own network Supplier capacity utilization – available excess capacity

Page 6 Recording of this session via any media type is strictly prohibited. Manage Supply Chain Risk Proactively identify potential risks and loss scenarios Monitor key supplier business continuity planning process – test it Build in redundancy to suppliers or within a supplier o Time needed to qualify new suppliers Increased inventory of key components

Page 7 Recording of this session via any media type is strictly prohibited. Transfer Supply Chain Risk Contingent business interruption / dependent time element insurance Supplier contracts – insurance / liability

Page 8 Recording of this session via any media type is strictly prohibited. Contingent Business Interruption Insurance Coverage Usually part of a broader property policy Typically provides coverage for the interruption or suspension of an insured’s business operations as a result of physical loss or damage to the property of a supplier, customer, etc. o Physical damage o Covered perils / All risk Potential coverage for multiple tiers of supply chain disruption o Direct v. indirect suppliers and/or customers o Named v. unnamed suppliers and/or customers o Tier 1, Tier 2, etc.

Page 9 Recording of this session via any media type is strictly prohibited. Contingent Business Interruption Insurance Coverage (cont’d) Understand applicable sublimits and deductibles o Different sublimits and deductibles may apply for different tiers and locations Typically provides coverage for both business interruption and extra expense Coverage issues o Concurrent causation o Lack of information from suppliers o When to give notice to insurers o Maintaining privilege during coverage investigation

Page 10 Recording of this session via any media type is strictly prohibited. Fact Pattern Snack maker that sells product through grocery stores and convenience stores Hurricane causes extensive widespread damage to multiple states where you sell your product Several hundred stores are impacted Policy only covers CBI losses as a result of physical damage o Stores were impacted by flood damage, wind damage, service interruption and civil authority

Page 11 Recording of this session via any media type is strictly prohibited. Measurement and Documentation Challenges Measurement issues o Allocation of losses by causation o Indemnity periods o Wind vs flood Documentation issues o Systems do not align or provide level of detail being requested to support the loss o Lack of information from suppliers o Historical data not maintained

Page 12 Recording of this session via any media type is strictly prohibited. Storm Surge Mapping Software

Page 13 Recording of this session via any media type is strictly prohibited. Questions, Final Comments and Contact Information Frank Huyberts - Allen Melton – Brad McCloskey –

Page 14 Recording of this session via any media type is strictly prohibited. EVALUATION INFORMATION / MOBILE APP Please complete the session survey on the RIMS14 mobile application.