Manufacturing

Manufacturers face complex risks, from supply chain disruptions to equipment failures. Our insurance solutions provide protection for your machinery, inventory, and workforce, ensuring that your production lines run smoothly. We also focus on advising on solutions coverage for liability risks and export-related challenges.

Products

  • Product Liability
  • Public Liability
  • Property
  • Business Interruption
  • Cyber
  • Professional Indemnity
  • Management Liability
  • Equipment Breakdown
  • Crime
  • Workers compensation
  • Motor
  • Corporate Travel
  • Marine

Some significant exposures for manufacturing businesses

  • Crime – fraud-based claims and employee dishonesty 
  • Cyber – external hacking to gain access to sensitive/confidential client information
  • Equipment – breakdown of conveyors, processing machinery, materials-handling and maintenance equipment
  • Environment liability – waste discharge, underground fuel storage tank leakages, chemical leakage, emissions, noise pollution
  • Management risks – breaches of WHS legislation, discrimination, privacy breaches and other employment practices liabilities
  • Product liability/product recall – manufacturing defects
  • Product liability/product recall – product labelling issues
  • Professional risks – errors and omissions from advice on designs and material
  • Property damage – high values at risk for stock, machinery and equipment and specialised plant
  • Property damage –  large fire load including product and packaging materials, refrigerants and chemicals
  • Property damage – many sources of ignitions from machinery, conveyors, material handling devices and loading dock/packing operations
  • Property damage – office/administration building risks (staff kitchens, appliances)
  • Public liability – slip and fall claims due to spillages (poor housekeeping)
  • Public liability – repairers and maintenance contractors on site: machinery processing line hazards
  • Workers’ compensation – musculoskeletal injuries including slip and fall, back injuries in stockrooms on loading bays
  • Workers’ compensation – machinery/production line risks including cuts, lacerations, burns and entrapment injuries

Product Spotlight – Product Recall

Product Recall Insurance protects businesses from financial losses related to recalling products from the customer to the supplier. This insurance covers losses including :

  • business interruption;
  • replacement costs; 
  • recall costs; 
  • third party recall costs; 
  • rehabilitation expenses; 
  • extortions costs; 
  • pre-recall costs; and 
  • consultant/advisor costs

The actual recall costs typically represent a small proportion of the total costs incurred as a result of a recall incident. The expensive items usually include product replacement costs and the loss of profits from business interruption.

The typical split of losses that an insurer covers under a product recall policy for a recall incident is shown in the graph below:

Product Recall Insurance is essential in industries like manufacturing, food, pharmaceuticals, and consumer goods, where it is often required for compliance or contractual agreements

Common sources of claims include:

  • Manufacturing defects
  • Unsafe products from imperfection, deficiency or defect
  • Accidental contamination
  • Intentionally impaired ingredients
  • Alleged contamination
  • Malicious product tampering
  • Product extortion

Claims Example

Business Details – Manufacturer of Milk Based Products

Background – The client manufactures milk-based products such as plain and flavoured milks, cheeses and yogurts. The client’s annual turnover is $35m. It was found that part of the hydraulic machinery’s fluid had leaked into one of the milk vats which lead to the product souring far sooner than labelled.

Outcome – The insured’s product recall policy covered the payments for advertising costs, recall costs, replacement costs and other costs including testing.

Total Payment – $600,000