nuclear power plant, the event prompted the closure of nuclear plants across Japan, removing a major source of the nation’s energy. The tsunami also was responsible for supply chain disruption in Europe and North America, for industries including automotive and electronics. Whether large or small in scale, property business interruption and contingent business interruption are common exposures for businesses. The opportunity for a single event to disrupt operations and prevent goods from being sold is a function of the interconnectedness of businesses today. Even relatively small businesses can have multinational exposures to property losses, notes Robert Fisher, a partner in Clyde & Co’s Atlanta office. As an example, a regional U.S. manufacturer and distributor faced a class-action lawsuit involving materials produced in China. The company was named as an additional insured in a policy obtained by its Chinese supplier. Clyde & Co was retained to advise the insurer in China as well as provide coverage opinions under U.S. and Chinese law. In another case, Clyde & Co assisted a client in subrogating a contingent business interruption claim in the United States that arose from a fire at a supplier plant in the United Kingdom, preventing the insured’s high-value products from being sold and fulfilling U.S. purchase orders. The ability of a law firm to provide expertise and seamless service around the world enables better client outcomes on all types of claims, Fisher says. August 12, 2015: Human error in storing volatile chemicals causes a series of enormous explosions at a warehouse complex in Tianjin, China. The blasts killed at least 173, injured hundreds, displaced thousands of people and caused extensive damage to cargo awaiting shipment. Destroyed in the explosions were more than 10,000 automobiles and more than 7,500 shipping containers. The Tianjin event is estimated to result in the largest man-made insurance loss in Asia and one of the largest in history, at $2.5 billion to $3.5 billion, according to Swiss Re. One of the outcomes of the Tianjin event was increased awareness of risk accumulation and the need to understand proximity to other perils.
August 31, 2016: Global supply chains are disrupted when financially struggling Korean shipping giant Hanjin Shipping files for bankruptcy protection. Hanjin, one of the world’s largest container ship operators, fell victim to the worldwide economic slowdown after the 2008 financial crisis as well as sharply lower shipping rates. Hanjin felt the impact of lower rates on routes between Asia and Northern Europe and Asia and North America, which represented a large percentage of its revenue. Meanwhile, in September 2016, an estimated $14 billion of cargo was stranded aboard Hanjin vessels which were prevented from entering ports due to the risk or threat of arrest by Hanjin creditors, and the port operators’ fears that the shipping company would be unable to pay docking fees. The delays in shipping are expected to have downstream effects on the revenue and profits of many retailers as they scrambled to arrange alternative logistics. About 95% of the world’s manufactured goods are transported in containers, making disruptions such as the Hanjin bankruptcy a major risk for manufacturers, distributors and merchants. February 18, 2008: The U.S. Department of Agriculture announces one of the largest-ever recalls of ground beef, totaling 143 million pounds, by a California meat company. Widely distributed among restaurants, grocers and even federally subsidized school lunch programs, the recall created logistical challenges for customers of the meat company, and the USDA acknowledged that much of the product subject to the recall had already been consumed. The recall was prompted after a clandestinely filmed video of employees abusing ill cows raised questions about food safety. The incident brought further scrutiny to food producers, raised awareness of product liability risks and ushered in more stringent regulations. In 2007, there were 21 recalls of beef suspected of contamination with the pathogen E. coli. Although the USDA classified the health hazards from the 2008 recall as remote, the California meat company ultimately went into bankruptcy. Product liability risks extend well beyond the food and beverage industries. Manufacturers in virtually all industries face exposure to product liability claims. For example, 14 automobile manufacturers have been forced
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