Fire is one of the most serious risks faced by plastics manufacturers, whether they are producing secondary petrochemicals, fabricating and finishing plastics, or are involved with plastics moulding, foaming and extrusion.
A fire at a South Wales plastics factory, demonstrates why Business Interruption is a very useful cover to have. Production would cease for the duration of the investigation and in this case the factory was ultimately demolished. The period of non-production, from the fire to the new premises and production re-starting would be considered under the Business Interruption claim with a view to recover the losses endured during the time when the factory was out of action.
Insurers typically inspect plastics manufacturing companies’ facilities before quoting for a risk. As a potentially higher risk for insurers, it makes it important to ensure that risk management strategies are robust and regularly updated.
Insurers will typically look at aspects such as physical location – to assess impacts on the business from neighbouring properties and firm, who the business itself could impact and risks such as flooding. The survey will look at how the premises operate and how the manufacturing process takes place. It will assess aspects such as proximity to firefighting locations and what internal fire suppression systems are in place. Physical security at the premises will also be audited, to determine what measures exist to prevent theft of stock or potential arson.
Having an experienced insurance broker work with you, to keep your risk in “good shape” in an insurer’s eyes, can make all the difference. An informed broker will also be able to provide a plastics manufacturer with the types of insurance they required for their business. This will include covers such as Public Liability insurance and may also extend to Product Liability insurance, particularly if you are manufacturing plastic components that could fail, when used in other businesses’ production lines.
It should cover you for the business interruption costs that could occur if, perhaps, a plastic mould was damaged and you could not manufacture goods for a key contract, for some period of time. Business interruption could also come about through denial of access to the premises, floods and fires, loss or damage to stock and failures to equipment.
A trained broker will also help remind you of your responsibilities with regard to health and safety laws and inspection regimes such as COSHH (Control of Substances Hazardous to Health), LOLER (Lifting Operations and Lifting Equipment Regulations), PUWER (Provision and Use of Work Equipment Regulations) and LEV (Local Exhaust Ventilation) regulations.
They will talk you through other covers that could assist your plastics manufacturing business, particularly in a time of unstable supply chains, this including Failure of Supply insurance. In the current business environment it may be worth discussing Cyber insurance, with manufacturing systems becoming more reliant upon cloud technology.
Plastics manufacturing is a specialist area with many aspects that need to be taken into consideration to ensure the right covers are in place. This may require your broker to be able to access specialist markets, for example those offered in Lloyd’s, and the selection of a broker who can access and deliver these covers could be key.