PlastikCity Insurance Blog // Top Insurance Risks for Plastics Manufacturers in 2025: Are You Covered?
As a provider or manufacturer within the plastics industry, understanding the major insurance risks for 2025 is crucial to protecting and ultimately growing your business. In this blog, PlastikCity Insurance discusses some key areas you need to consider and ensure your insurance covers…
Supply Chain Disruptions
Risk: Major shipping routes are increasingly being targeted both politically and criminally, with President-elect Trump recently threatening to reclaim the Panama Canal. The resulting global supply chain issues—such as delays in raw material availability or increased shipping costs—can significantly impact production timelines and profitability.
Insurance Coverage: Business Interruption Insurance can cover lost revenue due to supply chain disruptions beyond your control. Adding Contingent Business Interruption (CBI) coverage provides further protection against issues with suppliers or key partners.
Regulatory and Environmental Compliance
Risk: Governments and organisations, such as COP24, are imposing stricter environmental regulations, including potential bans on certain plastic types. These changes could necessitate costly operational adjustments.
Insurance Coverage: Environmental Liability Insurance protects against claims related to pollution or environmental damage. Some policies include endorsements for regulatory compliance costs.
Cybersecurity and Data Breaches
Risk: Increased reliance on smart manufacturing practices exposes company systems to heightened risks of hacktivism, cyberattacks, and ransomware.
Insurance Coverage: Cyber Liability Insurance covers the costs of recovering from data breaches, ransom payments, and business interruption caused by cyberattacks.
Equipment Breakdown
Risk: While not unique to 2025, equipment breakdown remains a significant challenge. Downtime from broken or malfunctioning machinery causes production delays and lost revenue.
Insurance Coverage: Equipment Breakdown Insurance covers the costs of repairing or replacing damaged equipment and compensates for lost income during downtime.
Product Liability Claims
Risk: A defective product causing injury, financial loss, or systemic failure is a worst-case scenario for manufacturers, often leading to costly legal proceedings.
Insurance Coverage: Product Liability Insurance covers claims and lawsuits arising from product defects, including legal fees, settlements, and judgments.
Natural Disasters and Extreme Weather
Risk: Extreme weather conditions are becoming more frequent and severe. Damage to physical premises and stock can disrupt production significantly.
Insurance Coverage: Commercial Property Insurance protects buildings, equipment, stock, and contents from weather-related damage.
Fire and Explosion Hazards
Risk: The use of flammable materials, furnaces, and open flames in manufacturing makes fires and explosions a serious threat.
Insurance Coverage: Fire Insurance and Property Insurance cover damages caused by fires or explosions. Ensure your policy includes Business Interruption Insurance for revenue losses during repairs.
Workplace Safety and Employee Injuries
Risk: Manufacturing environments carry inherent risks of injuries from heavy machinery, chemical exposure, and repetitive stress. While robust health and safety procedures are mandatory, accidents can still occur.
Insurance Coverage: Employers’ Liability Insurance covers medical expenses, lost wages, and liability claims from injured employees.
Reputation and Brand Damage
Risk: A product recall or association with a negative environmental event can substantially damage your reputation and brand.
Insurance Coverage: Reputation Risk Insurance covers the costs of PR campaigns, brand rehabilitation, and crisis management services.
Rising Costs and Inflation
Risk: Inflation affects material costs, wages, and repair expenses, potentially leaving you underinsured.
Insurance Coverage: Ensure your Property Insurance and Business Interruption Insurance are indexed to inflation. Some policies include automatic inflation adjustments.
Are You Covered?
To ensure comprehensive protection, contact PlastikCity Insurance for a policy review. We can identify gaps in coverage, particularly for areas like cyber risks, environmental liability, and business interruption. Updating your policy annually to reflect evolving risks and business conditions is essential.
For expert guidance on policies tailored to protect your plastics manufacturing business, PlastikCity Insurance can help. Get your FREE no obligation quote today and PlastikCity Insurance will donate £25 to the Air Ambulance Service!
PlastikCity Insurance policies are arranged and administered by PHL Insurance Brokers Limited*.
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