Manufacturing

Manufacturing businesses are navigating a range of complex risks in today’s consumer-focused, fast-evolving, and interdependent economy. Marsh has the industry experience and risk management expertise to help you manage these risks and improve your bottom line.

The manufacturing landscape has become increasingly globalised as a result of digitisation and the adoption of a more customer-centric mindset.

Although this rapid digital transformation has helped manufacturers capture new cost efficiencies and pass value throughout the supply chain, it has also heightened risks related to geopolitical tensions, sustainability and climate resilience, cybersecurity weaknesses, environmental, social, and governance (ESG) concerns, and supply chain chokepoints.

For manufacturing companies, creating a comprehensive risk management program can help with effectively leveraging technology for productivity, while also safeguarding people and property from adverse events, such as bodily injury, damages, or other business interruptions.

Our team of risk management specialists, with their deep industry knowledge and best-in-class data and analytics capabilities, can help you reduce your total cost of risk and minimise volatility across your operations.

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FAQs

Although specific insurance requirements for manufacturing companies vary by their specific operations and business models, most companies will need to consider:

  • Cyber insurance: This helps cover claims from cyber events including a variety of losses from malware to ransomware and more.
  • Property insurance: Whether you own or lease your property, this covers the cost of your loss in the event of damage from a natural disaster or other malfunction risks that slow down or pause your day-to-day operations. Business interruption is also covered as part of this policy.
  • Business interruption and contingent business interruption insurance: This helps cover your lost income if you can’t run your manufacturing business due to covered property damage or loss, such as a fire or storm.
  • Liability insurance: This covers losses incurred by general liability, auto liability, and product liability, all of which are critical to manufacturers’ risk management programs.
  • Workers compensation insurance*: This covers losses incurred by companies as a result of their employees sustaining work-related injuries.
  • Director and officers (D&O) insurance: This coverage intends to protect individuals from personal losses if they are sued as a result of serving as a director or an officer of a business or other type of organisation.
  • Product liability and recall: Today, manufacturers lack clear visibility into each component and raw material sourced from around the world. However, when a product is contaminated or malfunctions, a poorly-managed product recall can destroy a company's brand name and profitability

* Marsh does not arrange workers compensation insurance in those States where there is a government scheme and provides only consultancy services in those States.

Although manufacturers will need to plan for vulnerabilities inherent to the industry, including workplace safety, supply chain interruptions, and product recalls, they will also need to consider emerging disruptive trends such as:

  • Sustainability and climate: Climate and sustainability concerns are expected to impact existing placements, the data required, and potentially the coverage offered to manufacturers. Manufacturers also may benefit from new product and coverage opportunities in response to emerging risks and sustainable business practices.
  • Environmental, social, and governance (ESG): Closely aligned to sustainability and climate, ESG has become a boardroom imperative. Manufacturers should consider business practices that reduce their impact on the environment, promote healthy communities, and maintain strict adherence to applicable regulatory and industry standards.
  • Globalisation: The events of 2020 highlighted how vulnerable business interactions are to global supply chain disruptions. Anything from grounded flights and natural disasters to cargo theft and quality control can impact the flow of goods, resulting in lost sales and reputational damage. Manufacturers should proactively plan for these disruptions to deliver products on time and on budget.
  • Technology: As companies continue leveraging technology in their business models and as cyber hackers become more sophisticated, this poses increased risks that can cause significant business interruptions.

You should consider implementing proactive risk management plans to address these and other evolving risks to mitigate their impact and have appropriate insurance coverages designed to reduce your total cost of risk.

By collaborating with an expert in risk management, manufacturers can minimise their risk exposures including risk of worker injuries, cyberattacks, and the impacts of severe weather and business interruption.

At Marsh, our manufacturing risk specialists understand your industry's unique risk-related challenges and can provide the guidance you need to help navigate risks. We combine our expertise with our data-driven analytics to provide you with insights that lead to better business outcomes and reduced risk.

At Marsh, we've worked with 80% of the top 20 global manufacturers to create risk management programs that reduce volatility and protect business continuity. We'll work with you to address industry-related risk exposures and find strategies to protect your bottom line, while capturing new opportunities, for a competitive advantage that makes your risk a business enabler.

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Steve Walsh

Chief Client Officer

  • New Zealand