Often manufacturers base their raw material, machinery and employee numbers on existing customers and retained contracts. Since the middle of 2007, manufacturing orders have decreased significantly, resulting in substantial job cuts and site closures. Consequently, while any large or significant orders would be gratefully received by many manufacturers, some may not be adequately prepared to fulfil the job.

New orders can often mean an increase in holding extra goods and materials, employing casual labour and working longer hours. All of this brings with it different risks:
Business Contents insurance will need to be increased to cover for the additional materials on the premises; tight deadlines may require staff to work longer hours or at a faster pace leading to accidents and mistakes. An RSA survey last year found that 35% of workers in the manufacturing sector fear they are more likely to have an accident due to being overworked. Employers liability cover and product liability cover are therefore advised; and if temporary staff are brought in, employers should ensure that they are sufficiently trained and abide by health and safety regulations.

Jon Sellors, UK Head of Communications, RSA, said, “With news that the manufacturing sector is improving, competition for orders will be fierce and many companies may overpromise to secure contracts. Those companies that do manage to meet the order may do so to the detriment of their employees and those that fail could face significant reputational damage. It is essential that companies approach their insurance broker for risk management advice in order to best take advantage of this current industry growth.”

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