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EDITOR’S CHOICE
PROTECTING THE GROWTH OF YOUR BUSINESS
affect operational and trading environments. In this article we outline key considerations for any manufacturer in 2024.
A EVENTS IN THE SUPPLY CHAIN
Global events over recent years have impacted supply chains enormously, from the increased prices and availability of raw materials to the recent disruption in the Red Sea impacting shipping times. Around 30 per cent of global container shipments pass through the Red Sea, however this was down by 90 per cent in January as ships began diverting around Africa, adding about 35 extra days to the usual journey from Asia to North Europe . Specialist cover may be needed above standard business interruption policies to fully address this risk.
RISK OF INSOLVENCY
Corporate insolvencies in the UK are currently at their highest level for 30 years, reflective of the multiple pressures on business trading in the flat UK economy alongside high borrowing costs and rising wages. Credit insurance can be used in several ways to mitigate this risk, whether it’s protecting against bad debt or enabling better credit terms.
THREAT OF CYBER ATTACK
Manufacturing is a key sector for ransomware attacks due to their reliance on critical system infrastructure through the increased digitalisation happening in the sector. Research shows that approximately two-thirds of cyber claims are a result of human error. AI is exacerbating the risk with the ability to write codes, which could be misused. A robust approach to this risk is often a combined approach with insurance and risk management strategies.
PRODUCT GUARANTEE & WARRANTY
Sometimes products do not always perform as expected but how a company responds can have vastly different impacts from a compliance or financial perspective as well as from customer confidence and reputation management. Proactively putting protection in place for these eventualities enables a better response should it be needed.
PROTECTING IP
New product development is being transformed through greater technology and AI capabilities. Protecting IP through trademarks, patents etc. is generally commonplace practice; however, additional consideration should be given to how insurance solutions can provide an additional layer of protection when defending claims or legal action.
Manufacturers enjoying growth and seeking business expansion opportunities should speak to their broker to ensure their insurance and risk management approach is keeping up with changes in their business. At Gallagher we take a comprehensive approach to risk audits, allowing our clients to face their future with confidence.
Arthur J. Gallagher Insurance Brokers
www.ajg.com/uk/
12 Spring 2024 UKManufacturing
s a manufacturing business grows and evolves so too does their risk profile. A robust risk management strategy will respond not only to changes within a business but also to external factors that can
5 KEY RISK CONSIDERATIONS FOR MANUFACTURERS
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