Date: August 21, 2025 | Reading time: 10 minutes
Whether importing electronics, clothing, raw materials, or food products, any unexpected disruption in the supply chain can lead to heavy financial losses, reputational damage, and even business shutdowns.
Yet most businesses still rely on outdated insurance solutions that fail to cover today’s complex scenarios.
In this article, we’ll dive into the world of Trade Disruption Insurance (TDI) — a coverage that provides a modern response to global threats disrupting shipments without causing physical damage.
We’ll explain why TDI differs from any other insurance, when it becomes critical for a business, what risks it covers, and why many importers worldwide no longer go without it.
This read is highly recommended for anyone looking to protect their business not only from legal risks but also from the economic consequences of external disruptions beyond their control.
What is Trade Disruption Insurance (TDI) and why is it needed?
Trade Disruption Insurance (TDI) is a unique insurance solution designed to address one of today’s biggest challenges for importers and business owners: the inability to import and deliver goods, even when no physical damage has occurred.
Most commercial insurance policies, such as property insurance or business interruption insurance, only apply if actual damage occurs-such as a warehouse fire, flooding, or burglary.
But what happens when there’s no physical damage, and yet… the goods simply don’t arrive?
A shipment might be stuck due to a blocked port, labor strike, political lockdown, global pandemic, or extreme weather conditions.
In such situations, many businesses are left completely exposed-with no ability to claim compensation and facing losses that can sometimes reach millions.
This is exactly where TDI comes in, offering protection against lost revenue, delays, additional costs, and cash flow damages-even when there’s no direct damage to goods or property.
How is TDI different from traditional insurance?
At first glance, TDI may seem similar to business interruption insurance or marine insurance.
In reality, it’s an entirely different product-broadening protection to scenarios that traditional policies do not cover.
| Insurance Feature | Trade Disruption Insurance (TDI) | Business Interruption | Marine Insurance | Property Insurance |
|---|---|---|---|---|
| Requires physical damage? | No | Yes | Yes | Yes |
| Covers external disruptions (lockdown, pandemic, protests) | Yes | Very limited | Usually no | No |
| Force majeure events | Yes | Usually no | Partial | No |
| Additional operational costs from disruption | Yes | Partial | Usually no | No |
| Best fit for international importers | Especially | Sometimes | Yes | Less |
| Flexibility & customization | High | Medium | Low | Low |
This table highlights TDI’s advantage as a coverage built for today’s global reality-where a shipment delay or port closure can disrupt entire supply chains.
Real-world disruptions and how TDI responds
COVID-19 pandemic
Prolonged shipping and airfreight delays, factory shutdowns, labor shortages, and border closures collapsed supply chains.
TDI provided coverage for lost profits, alternative storage costs, and unforeseen logistics expenses.
Russian invasion of Ukraine
Port closures, economic sanctions, and raw material disruptions triggered cancellations and stock shortages.
TDI included protection against political risks and acts of state.
Suez Canal blockage by the Ever Given
Goods were stranded at sea for weeks without compensation from traditional insurers.
TDI policyholders received payouts for delays and mounting additional costs.
Impact of the Israel war
As the conflict expanded and Houthi attacks targeted cargo ships in the Suez Canal and Red Sea, carriers rerouted vessels, causing widespread delays and higher shipping costs.
Here, TDI provided essential coverage for added expenses and reduced profitability-even without any physical damage to the goods.
These examples demonstrate how unpredictable the world has become-and how critical it is to be covered against scenarios once considered exceptional.
Who should consider TDI, and when is it essential?
While theoretically every business can benefit, TDI becomes almost indispensable in certain cases:
Importers trading with politically unstable regions
Businesses importing from China, Turkey, Ukraine, East Africa, South America, or the Middle East face constant risks of regulatory shifts, sanctions, or instability.
Companies dependent on a single supply chain or exclusive supplier
Any failure at a key supplier can halt production or sales entirely. TDI can cover alternative sourcing costs, compensation, and cash flow losses.
Time-sensitive or seasonal goods
Examples include holiday toys, summer fashion, or perishable foods. Any delay means lost sales that cannot be recovered.
Industries with complex supply chains (pharma, high-tech, manufacturing)
Even a short interruption can affect the entire operation.
Businesses bound by contractual commitments
Late delivery penalties or contract cancellations may be covered under TDI.
In short: any company dependent on the stability of international trade should seriously consider TDI as part of its risk management strategy.
Who provides TDI and how is it priced?
TDI is a niche product offered today by a small number of global players:
Tysers – A London-based broker working with Lloyd’s syndicates. Offers tailor-made policies covering delays, lost profits, contractual penalties, and extra costs-even without physical damage.
Tokio Marine Kiln (with Marsh) – Provides disruption coverage for ports, with limits up to USD 50 million per event, including shipping and trade interruptions.
Norwegian Hull Club – One of the world’s largest marine insurers, offering TDI as part of Loss of Hire coverage, with fast response, customization, and solutions for complex operational risks.
How pricing works:
Based on profit margins rather than the total value of goods.
Cost can be reduced by showing alternative logistics solutions.
Factors influencing premiums:
Business size and trade volume.
Industry and exposure levels.
Geopolitical risk in operating regions.
Claims history.
And in Israel?
Currently, no Israeli insurance company offers structured TDI policies.
Local solutions focus on marine insurance, export credit, or political risk coverage-without addressing losses from delays or non-damage disruptions.
Israeli importers seeking this coverage must turn to international markets, usually through specialized brokers.
Conclusion
Trade Disruption Insurance (TDI) is not just a “nice-to-have” but a critical safeguard in a world where even minor delays can cause major losses.
It fills the gap left by traditional insurance: covering situations where there is no physical damage, yet goods don’t arrive, deliveries are delayed, or borders are blocked.
This coverage is especially relevant for importers, manufacturers, traders, and companies relying on smooth global logistics-from factory to warehouse.
Its uniqueness, and the fact it’s currently unavailable through Israeli insurers, underscores the importance of working with experienced international brokers.
For businesses seeking continuity even in extreme scenarios, TDI is not a luxury-it’s a smart investment in resilience.
Expert Interview: Why are businesses choosing Trade Disruption Insurance?
A professional discussion with industry experts on how unexpected global events have made this insurance essential for every international supply chain (11:45 min).
Trade Disruption Insurance is a coverage that compensates businesses for losses caused by delays, blockages, or logistical disruptions in the supply chain-even without physical damage to the goods.
Unlike business interruption insurance, which requires physical damage to property or goods, TDI provides coverage in cases of sanctions, protests, port blockages, or natural disasters-even when there is no direct physical damage.
The insurance is suitable for importers, manufacturers, and traders operating in the international arena who depend on complex supply chains, especially in regions with high political or logistical risk.
As of today, Israeli insurance companies do not offer dedicated TDI policies. To purchase such coverage, one must turn to international brokers or insurance agencies abroad.
Pricing depends on the company’s profit margins, industry sector, geopolitical risks, and the level of logistical complexity. Typically, it involves a relatively low premium since the coverage is based on profit loss rather than the full value of the goods.
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