Mitigating Business Interruptions Amid Rising Insurance Costs

Rising insurance costs in the energy sector are causing widespread concern, particularly when it comes to managing business interruptions. As claims severity increases due to inflation, material costs, and labor shortages, energy companies are seeing longer repair times, extending downtime periods. To navigate this challenge, it’s important to implement comprehensive business continuity plans.

Energy operators should focus on pre-emptive risk management, such as investing in regular equipment maintenance, improving supply chain resiliency, and leveraging alternative risk financing options like captives. Ensuring appropriate business interruption coverage is equally essential, particularly in today’s volatile market.

Key strategies to mitigate downtime:

1. Regular Equipment Maintenance: minimizing equipment failures can prevent costly operational disruptions. A robust maintenance schedule will help mitigate the risk of prolonged business interruptions.


2. Enhancing Supply Chain Resilience: ensure that key suppliers have contingencies in place to maintain service, even during disruptions.


3. Exploring Alternative Risk Financing: captives and self-insurance provide ways to offset rising premium costs while maintaining strong coverage for energy firms.

By proactively addressing these risk factors, energy companies can better withstand disruptions and protect their bottom line.