Specialist manufacturing insurance or manufacturing business interruption insurance could help businesses guard against supply chain delayed repairs.
The fragility of the domestic and international supply chain could hit manufacturers hard as delays hit the production and distribution of spare parts.
Pandemic and Brexit-related have hit the logistics sector hard. The Road Haulage Association has estimated the UK is currently short of some 100,000 HGV drivers.
The Confederation of British Industry's (CBI) monthly Industrial Trends Survey reported stock adequacy at its lowest level since it first collated data in 1977.
The CBI's lead econonomist, Alesha Palesha noted:
“It is notable that stock adequacy deteriorated to a new record low for the third consecutive month. Many firms are feeling the pinch from ongoing supply chain disruption, which also partly explains the continued strength in pricing pressures."
Supply chain stresses
Stresses on supply chains have been widely reported, from McDonald's running out of milkshakes, Wetherspoons this week apologising for beer shortages and Jaguar Land Rover (JLR) warning of year-long lead times for company car orders.
JLR was also forced in April to shut down production at its Halewood plant due to the ongoing global shortages of semi-conductors.
JLR's difficulties highlight a less well publicised risk posed by supply chain frailities. Parts supply.
Manufacturers rely on machinery to maintain optimal output and profitability.
Covering critical assets
Plant and machinery are critical assets.
If a piece of kit central to the manufacturing process breaks down, costs can quickly add up and customer goodwill equally rapidly decline.
But that machinery may be complex and its components manufactured anywhere in the world. The sourcing of a vital spare part, may, like auto industry semi-conductors, be dependent upon an increasingly delicate supply chain.
What may in other circumstances be a short-lived frustration could turn into a major financial hit.
Any mechanical breakdown, repair delay and subsequent business interruption will not be covered by a standard commercial property insurance policy.
Specialist machinery insurance
The good news is that specialist cover does exist to protect against such risks.
One of the commercial insurance industry's better kept secrets, machinery insurance can protect against consequential loss of profits - business interruption - and other costs such hiring replacement plant or machinery.
Whilst it may come into its own during the current supply chain crisis, it also offers a range of other benefits.
These include covering sudden or unforeseen damage caused, not just by breakdown, but operator error, explosion, collapse or accident. Additional costs such as overtime payments and the recruitment of temporary workers may also be covered.
A machinery business interruption policy may also protect against failure of supplies by a third party, such as loss of electricity or water.
Under the umbrella of a our specialist Engineering & Plant Insurance portfolio, RBIG have access to range of enhanced machinery insurance covers.
Drawing on our 40 years' experience we can offer specialist business insurance advice which is specific to the risks your company may face.
If you'd like to discuss how you machinery insurance can protect your business against current supply chain uncertainties and your mechanical equipment, please call James Brown on 0161 304 5036.
Alternatively you can email your request for a no-obligation consultation by clicking here.