Across industries, leadership teams consistently rank supply chain disruption as a top concern. Yet when we compare perceived impact with the specific cover firms hold across five major peril categories, a pattern emerges: In many cases, resilience priorities and insurance architecture are not yet aligned. The opportunity is to bring them together, engineering resilience first, and financing the residual, with insurance markets that are increasingly equipped to support this shift.
Drawing on the WTW Global Supply Chain Survey 2025, a study of 1,000 firms with revenues above $250 million across North America, Europe, Asia-Pacific, and Latin America, we examined not simply whether companies manage risk, but whether their chosen responses align with the impact they say they face.
The headline is consistent across five categories: Cyber, Environmental, Errors & Omissions (E&O), Public Liability, and Reputation. On average, perceived impact runs ahead of specific cover for supply chain risk. Put simply, underinsurance relative to self-reported concern is common among the surveyed companies.
What distinguishes this work is a transparent, replicable alignment metric built from respondents’ own answers, not external benchmarks. That design lets us compare patterns across risks and firms without importing assumptions about what any company “should” buy. Applied to the 2025 sample, the result is clear: mean misalignment is positive in all five categories.
Where the market is mature, and where it isn’t
The most consequential gap in our data appears in reputation risk. Four in five companies in our sample fall on the underinsured side relative to their own stated concern, and the average gap is the largest in the set.
That pattern is consistent with how markets currently work: reputational cascades are hard to attribute, often correlated across firms, and difficult to price, factors that limit product maturity and capacity compared with better specified lines.
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By contrast, cyber looks comparatively balanced: about half of firms hold specific cyber cover and the split between under and underinsurance is narrower than for other categories. This reflects a decade of market development that ties eligibility and pricing to observable controls and rehearsed incident response.
Alongside reputation, environmental (59.2% underinsured), public liability (60.7% underinsured), and E&O (72.3% underinsured) are underinsured on average in our sample, confirming that concern frequently outruns specific cover across multiple supply chain perils.
How CBI got here, and why it matters for misalignment
Historically, contingent business interruption (CBI) has lived inside the time-element section of a commercial property program as an extension: loss of income to the insured caused by a covered physical damage event at a supplier, customer, or dependent property (often “named suppliers” or a narrowly defined blanket).
In practice, this means coverage remains largely anchored to physical damage to property—a trigger that is increasingly misaligned with how supply chains actually fail. Coverage typically hinges on property damage triggers and comes with additional time-element extensions, such as civil authority and ingress/egress, which also generally require physical damage within a specified radius and are sensitive to exact wording.
On average, perceived impact runs ahead of specific cover for supply chain risk.
Coverage remains largely anchored to physical damage to property—a trigger that is increasingly misaligned with how supply chains actually fail.
That “damage dependency” is a major driver of the misalignment we observe. Many of today’s most material supply chain disruptions, port closures, sanctions and regulatory orders, global vendor outages, strikes and social unrest, or upstream cyber events, do not result in direct physical loss where the policy expects to see it.
As a result, portfolios built around property-based CBI extensions can lag the exposures leadership teams actually worry about, even when the organization believes it is “insured”.
Compounding this, the market response to pandemic-scale events has been to tighten or exclude communicable disease in many property/CBI programs and reinsurance treaties, further narrowing damage-based triggers precisely where non-damage shockwaves propagate fastest across supply chains.
Where CBI is moving toward non-damage triggers
While property-based CBI remains the backbone for damage-driven interruptions, buyers and carriers are experimenting with non-damage business interruption (NDBI) solutions that respond to defined events without requiring physical loss, ranging from cyber policies that include dependent business interruption to parametric covers that pay when objective indices are breached (e.g., windspeed, EQ intensity, rainfall, port closure proxies), delivering speed and certainty where traditional wordings struggle.
This is not yet a deep, mass-market solution set. For many NDBI perils, especially reputational harm and complex, multitier supplier failures, wordings remain bespoke, capacity is selective, and documentation burdens can be heavy. As a result, the distinction between “insured” and “effectively protected” can still be material.
Cyber offers a credible template for progress: clearer triggers, capability-conditioned eligibility, and streamlined claims operationalization have helped insurance and operations function as complements, not substitutes, reducing the misalignment our data surfaces.
What this means for boards today
Seen through this lens, our findings are less a verdict on premiums than a call for alignment. If your supply chain loss map is dominated by non-damage scenarios while your insurance architecture is anchored in property-triggered time-element and thin named-supplier extensions, the gap we measure is to be expected -not a failure of diligence, but a design mismatch between old triggers and new exposures.
Boards should therefore treat misalignment as a design signal rather than an insurance gap. The commercial path forward is to engineer what you can and finance what you can’t: raise the operational baseline (supplier transparency, monitoring, crisis communications, route and inventory options), then use targeted transfer, cyber with dependent BI features, carefully structured CBI where damage risk is real, and parametric solutions for well-defined non-damage triggers, to restore fit between concern and cover.
Not just averages: distinct strategy profiles
Averages can conceal structure, so the research team also applied latent profile analysis to see whether organizations cluster into recognizable risk–response configurations.
They do. We observe a “broadly aligned” segment; segments that overweight traditional liability lines while leaving reputation comparatively bare; a large segment with mild, across-the-board underinsurance (especially on reputation); and a segment that is pervasively underinsured across all five risks.
These configurations are associated with different self-reported disruption-loss experiences over the prior year, even after controlling for supply chain maturity and firm size. That association is not a causal proof, but it does show that strategy patterns matter, and that they track with outcomes in this sample.
About the study and our research partnership
This analysis uses the WTW Global Supply Chain Survey 2025 (1,000 senior respondents; November 2024). It is part of ongoing work by WTW Research in collaboration with the MIT UK Supply Chain and Logistics Excellence (SCALE) Centre at Loughborough University, the UK node of the MIT Global SCALE Network founded with MIT’s Center for Transportation & Logistics to advance supply chain innovation and drive it into practice.
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