MARSH SUPPLIER CHOOSE
As supply chains become more critical and expose companies to increased risks, some organizations feel it is a long way to validate their suppliers' insurance coverage, ensure supply chain efficiency and avoid claims globally.
The need for an effective method of obtaining insurance for small, often new suppliers became apparent to Erica Chervony, an Atlanta-based associate producer at Marsh LLC, who began working for the broker three years ago as an office representative for a large retail organization.
"I saw a clear need for suppliers who wanted to do business with big-box stores," she said. "But if, for example, they were small, new suppliers in China or India without operations in the United States, they could not get insurance here and often did not have the resources to get it."
After discovering that there was no program to help companies, she began looking for a solution. With the help of employees Candace Lemond, Mac Nadel, David Schwartzenfeld and colleagues from Marsh Digital, a new program, Marsh Supplier Select, was launched in February. The timing of the program, a winner of the 2020 Business Insurance Innovation Award, proved to be perfect for what was to come.
"A store that has a supplier who can no longer work with them due to coronavirus may, for example, need to diversify and find a supplier abroad that may not be insured," says Chervony. “With this program, the company can direct the supplier to the Marsh Supplier Select portal; they get a quote and pay for the product directly. They then receive a certificate and they can do business together immediately.
The program is designed to help suppliers in other countries, as well as US suppliers who do not have the resources to get the coverage they need, e.g. farmers who want to sell their products to grocery stores, she said.
Marsh Supplier Select also relieves the risk management departments from the job of finding coverage for such suppliers. "Several risk managers I spoke to said that the burden is usually on their buyers to ensure that all their suppliers meet the insurance requirements," said Chervony. "When suppliers are unable to get coverage, however, the problem falls on the risk managers who have to find a solution."
The response around has been very positive, she added. "Especially since it's a digital tool, it's easy for anyone who needs it to get insurance," she said.