As a manufacturer or supplier in the plastics industry, understanding the key insurance risks for 2025 is essential to safeguarding your business and ensuring growth. At PlastikCity Insurance, we specialise in helping businesses within the plastics sector address these risks with tailored insurance solutions. Here, we explore the critical areas you need to consider and ensure your insurance policies cover.
Supply Chain Disruptions
Risk: Major shipping routes face increasing threats from political and criminal activities, which can lead to delays in raw material availability and rising shipping costs. For instance, political tensions such as those surrounding the Panama Canal highlight the fragility of global supply chains.
Insurance Coverage: Business Interruption Insurance can cover revenue losses resulting from supply chain disruptions. Adding Contingent Business Interruption (CBI) coverage extends protection to issues affecting your suppliers or key partners.
Regulatory and Environmental Compliance
Risk: Stricter environmental regulations, including potential bans on specific plastic types, are being implemented by governments and organisations such as COP24. These changes may require costly adjustments to operations.
Insurance Coverage: Environmental Liability Insurance protects against claims related to pollution or environmental damage. Certain policies also cover regulatory compliance costs.
Cybersecurity and Data Breaches
Risk: Increased reliance on smart manufacturing exposes systems to cyberattacks, hacktivism, and ransomware. These threats can disrupt operations and compromise sensitive data.
Insurance Coverage: Cyber Liability Insurance provides financial protection for costs associated with data breaches, ransom payments, and business interruption caused by cyberattacks.
Equipment Breakdown
Risk: Equipment breakdown continues to pose challenges for manufacturers. Downtime from malfunctioning machinery can lead to production delays and financial losses.
Insurance Coverage: Equipment Breakdown Insurance covers the repair or replacement of damaged machinery and compensates for lost income during downtime.
Product Liability Claims
Risk: Defective products that cause injury or financial loss can lead to expensive legal proceedings and reputational damage.
Insurance Coverage: Product Liability Insurance covers legal fees, settlements, and judgments resulting from claims or lawsuits related to product defects.
Natural Disasters and Extreme Weather
Risk: The frequency and severity of extreme weather events are increasing, posing risks to physical premises and stock.
Insurance Coverage: Commercial Property Insurance protects buildings, equipment, stock, and contents from weather-related damage.
Fire and Explosion Hazards
Risk: Manufacturing processes involving flammable materials and high heat create a heightened risk of fires and explosions.
Insurance Coverage: Fire Insurance and Property Insurance cover damages caused by fires or explosions. Including Business Interruption Insurance ensures revenue protection during repairs.
Workplace Safety and Employee Injuries
Risk: Manufacturing environments carry inherent risks, including injuries from heavy machinery, chemical exposure, and repetitive tasks. Despite robust safety measures, accidents can still occur.
Insurance Coverage: Employers’ Liability Insurance covers medical expenses, lost wages, and liability claims arising from workplace injuries.
Reputation and Brand Damage
Risk: Incidents such as product recalls or negative environmental associations can harm your reputation and brand value.
Insurance Coverage: Reputation Risk Insurance helps with PR campaigns, brand rehabilitation, and crisis management to minimise damage.
Rising Costs and Inflation
Risk: Inflation impacts material costs, wages, and repair expenses, potentially leaving your business underinsured.
Insurance Coverage: Property Insurance and Business Interruption Insurance indexed to inflation ensure adequate coverage. Some policies include automatic inflation adjustments.
Are You Covered?
To ensure your business is fully protected, contact PlastikCity Insurance for a comprehensive policy review. We can identify potential gaps in your coverage, particularly in critical areas like cyber risks, environmental liability, and business interruption. Regularly updating your policies to reflect evolving risks is vital.
Get in touch with PlastikCity Insurance today for a FREE no-obligation quote. For every enquiry we receive, we’ll donate £25 to the Air Ambulance Service as part of our commitment to the community.
PlastikCity Insurance policies are arranged and administered by PHL Insurance Brokers Limited.
