#NEWS

22/05/2018

Supplier risk

Preventing and insuring one’s risks is an obvious step for any institution. Experience has proven that equal attention should always be given to the way in which your suppliers or subcontractors manage and insure their own risks.

 

 

What risks are we talking about?

 

Suppliers can cause your institution to suffer various forms of harm following on:

– The non-performance of a service or non-delivery

– Poor service, nonconformity or performance failure of a product or installation

– Delay in delivery

– Technical incident (fire, water damage, breakdown, etc,)

 

Your supplier may manage key aspects of your organisation, such as healthcare equipment, meals, fluids, facility maintenance, laundry, IT system, etc.

 

In addition, when the supplier operates on your premises, it may cause harm to patients, residents, visitors, staff or your assets.

 

 

What do you know about your supplier?

 

– Who is it? What about its financial base and solvency?

– What proportion of the supplier’s total turnover comes from you?

– What is your degree of dependency on the supplier? If it seems too high, how can you reduce it or ensure continuity of production in the event of a deficiency?

– What insurance coverage does the supplier have?

– How does it manage risks related to your operations?

– How does it manage product risk: quality policy, traceability, crisis management plan, etc.?

– Do you have a process for qualifying it?

– Do you conduct regular audits of it?

 

 

Which contractual policy should be pursued with suppliers?

 

– Pay close attention to the clauses in the agreement to be signed and reject any clauses which allow the supplier to limit or dodge liability, especially those which exclude any financial consequences caused

– Check that, in the event of dispute, your options to seek recourse against the supplier are preserved in all casesIf not, report it to your insurance adviser. Indeed, if your insurers do not approve the renunciation of recourse clauses, they may deny the implementation of their coverage.

 

 

How can you check your supplier’s insurance coverage?

 

Even if you declined the clauses limiting the liability of the supplier, it is important to check the scope of the civil liability coverage of your major suppliers by asking them to provide a certificate of general civil liability insurance in order to organise recourse actions when the liability of said suppliers is likely to be invoked.