Plastic Industry Solutions
The plastic industry faces unique risks, from product liability to environmental concerns. The right insurance can protect plastic companies from financial losses and ensure their long-term viability. Icare insurance solutions is the strongest choice for plastic industries, due to their potential understanding of its risks and risk mitigation strategies. At iCare, we have experience working with plastic companies and understanding the unique risks they face, such as fires, explosions, product liability, and pollution. This knowledge can help them tailor insurance policies to effectively address these risks.
Key Risks
The plastic industry faces several inherent risks that make insurance crucial for operations. Here are some key ones:
- Product Liability: Plastic products can malfunction or cause harm if not designed, manufactured, or labelled correctly. Liability insurance protects companies from financial losses due to lawsuits alleging product defects.
- Property Damage and Business Interruption: Fires, explosions, and other incidents can cause significant property damage to plastic manufacturing facilities. Industrial all-risk insurance covers losses and business interruption caused by these events.
- Worker Injuries: Working with machinery and hazardous materials can pose a risk of injuries to plastic industry employees. Workers’ compensation insurance ensures financial protection for medical expenses, lost wages, and other benefits.
- Environmental Damage: Plastic pollution and improper waste disposal are environmental concerns associated with the plastic industry. Environmental liability insurance helps cover costs associated with clean-up and regulatory fines.
- Cybersecurity Threats: The plastic industry increasingly relies on digital technologies, making it vulnerable to cyberattacks. Insurance against cyber liability guards against data breaches and the monetary damages from these types of assaults.
- Market Shifts and Regulation: The plastic industry faces growing public pressure to reduce plastic use and embrace sustainable practices. Trade credit insurance can protect companies from financial losses if key customers leave business due to these shifts. Additionally, regulatory changes can impact production processes or product formulations. Having insurance for legal defence costs associated with navigating these changes becomes crucial.
- Supply Chain Disruptions: The plastic sector’s supply chain for raw materials and completed items is intricate worldwide. Political instability, natural disasters, or trade wars can disrupt these chains. Property damage or business interruption insurance can help mitigate financial losses caused by such disruptions.
- Evolving Technologies: Developing new plastic materials, recycling technologies, and bioplastics can rapidly change the competitive landscape. Research and development (R&D) can be expensive, and product liability insurance becomes even more critical as new products are introduced.
Product
1. Commercial General Liability (CGL)
Plastic producers are shielded against monetary losses by Commercial General liability (CGL) insurance, a form of company insurance, against third-party responsibility for property damage or personal injury.
What does it cover?
- Bodily injury
This covers claims against your business for injuries sustained by a third party on your property or due to your operations. For example, CGL insurance can assist in paying for medical bills if a client trips and falls on a damp floor at your establishment and sustains injuries.
- Property damage
CGL insurance can help defray the expense of repairs or replacements if your business operations damage another person’s property.
- Product liability (caused by a defect in a plastic product)
This is crucial coverage for plastic manufacturers. If a defect in one of your products causes injury or property damage, CGL insurance can help cover legal costs and financial settlements.
Contractual liability arises if your business fails to fulfil a contractual obligation, causing the other party financial losses.
What it typically doesn’t cover?
- Pollution: CGL insurance typically excludes coverage for environmental pollution caused by your business.
- Workers’ compensation is a separate type of insurance that covers the work-related injuries or illnesses of your employees.
- Intentional misconduct: If your business intentionally causes harm, CGL insurance won’t provide coverage.
Additional coverage available for an extra premium:
- Cyber liability insurance: This protection can shield your company from monetary damages from hacking or data breaches.
- Errors and omissions (E&O): Also known as professional liability insurance, E&O coverage can protect your business from claims that you failed to perform a service properly or made negligent mistakes.
2. Directors & Officers Liability
Directors & Officers (D&O) liability insurance in the plastic industry protects directors and officers of plastic companies from financial losses arising from lawsuits alleging they failed to fulfil their duties.
What does it cover?
- Defence costs in lawsuits
- Judgments and settlements
- Regulatory fines and penalties
What it doesn’t cover?
- Intentional wrongdoing
- Employee dishonesty
- Pollution
Additional coverage available for an extra premium:
- Employment practises liability
- Cyber liability
3. Workman Compensation Policy
Workers’ compensation insurance, which is legally required, shields employees in the plastics business from monetary damages in the event of an injury or illness sustained while performing job-related duties.
What does it cover?
- Medical expenses
- Lost wages
- Disability benefits
- Rehabilitation costs
- Death benefits (payable to dependents)
What it doesn’t cover?
- Injuries caused by employee
- intoxication or willful misconduct
- injuries sustained when working outside the job
- Damage to personal property
Additional coverage available for an extra
Premium:
- Employer liability insurance
- Occupational disease coverage
4. Standard Fire & Special Peril Policy
Standard fire and special perils policy (SFSP) is a property insurance policy that protects plastic manufacturers from financial losses caused by physical damage to their property.
What does it cover?
- Fire damage
- Lightning strikes
- Explosions
- Riots, strikes, and malicious damage
- Windstorms
- Hail damage
What it doesn’t cover?
- Floods
- Earthquakes
- Wear and tear
- Theft (unless caused by a covered peril)
Additional coverage available for an extra premium:
- Business interruption insurance
- Equipment breakdown insurance
- Flood Insurance
- Earthquake insurance
5. Group Health Insurance
Group health insurance is an employer-sponsored plan that provides medical coverage to plastic industry employees and their dependents.
What does it cover?
- Hospitalisation costs
- Doctor visits
- Prescription drugs
- Preventive care services
What it doesn’t cover?
- Dental and vision care (often offered as separate plans)
- Long-term care
- Cosmetic surgery
Additional coverage available for an extra premium:
- Life insurance
- Accidental death and dismemberment insurance
- Critical illness insurance
6. Group Personal Accident
Employee benefits such as group personal accident (GPA) insurance shield workers in the plastics sector financially in the event of an accident that causes harm, disability, or death.
What does it cover?
- Accidental death benefit
- Permanent total disability benefits
- Permanent partial disability benefits
- Medical expenses (limited coverage)
What it doesn’t cover?
- Injuries or illnesses not caused by accidents
- Pre-existing conditions
- Accidents resulting from intoxication or intentional misconduct
Additional coverage available for an extra premium:
- Increased benefit amounts
- 24/7 ambulance services
- Group Term Life
Group term life insurance is a plan employers in the plastic industry offer their employees as a benefit. It provides financial protection to the employee’s beneficiaries in case of the employee’s death during the policy term.
What does it cover?
- A death benefit is paid to the beneficiary upon the employee’s death
What it doesn’t cover?
- Death due to suicide (within the first few years of coverage)
- Death from a pre-existing condition (if not disclosed during application)
- War or acts of terrorism
Additional coverage available for an extra premium:
- Accidental death benefit rider
- Waiver of premium rider
7. Industrial All Risk
A comprehensive property insurance coverage specifically tailored for companies in the plastics sector is called industrial all risks (IAR) insurance. It provides defence against threats that might cause property damage, impede company operations, or cause mechanical failures.
What does it cover?
- Material damage: Loss or damage to buildings, machinery, inventory, and other business assets caused by various perils like fire, theft, explosions, storms, and accidental breakage.
- Business interruption: Loss of income resulting from a covered cause of material damage that disrupts normal operations.
- Machinery breakdown: Damage to machinery due to mechanical or electrical failures.
What it doesn’t cover?
- Gradual wear and tear of property
- Floods and earthquakes (unless separately covered)
- Intentional damage
- Pollution
Additional coverage available for an extra premium:
- Increased coverage limits
- Terrorism insurance
- Cyber liability insurance
8. Marine Open Policy (MOP)/Sales Turnover Policy
A marine open policy (MOP) and a marine sales turnover policy (STOP) are both marine cargo insurance options, but they differ in how they handle coverage and premiums.
- Provides coverage for individual shipments declared during the policy period.
- Premium is based on the value of each declared shipment.
- Requires frequent declarations of shipments to ensure continuous coverage.
- Covers all cargo movements within a company’s annual sales turnover.
- Premium based on the company’s estimated annual sales turnover.
- No need to declare individual shipments, reducing administrative hassle.
What is Not Covered?
- Losses due to inherent vice or nature of the insured goods, such as spoilage or breakage due to inherent defects.
- Delay in transit
- War and allied perils
- Fines and penalties imposed by regulatory bodies
- Insolvency or fraud by the buyer or seller
9. Trade Credit Policy
Businesses in the plastics sector employ trade credit policies as a risk management technique to guard against financial losses resulting from nonpayment by customers.
What does it cover?
- Nonpayment of invoices by customers due to insolvency, bankruptcy, or protracted default.
What it doesn’t cover?
- Poor creditworthiness of the customer (credit checks are essential before issuing credit)
- Late payments (though some policies may offer coverage for extended delays)
- Deliberate nonpayment by the customer
Additional coverage available for an extra premium:
- Political risks (e.g., war, civil unrest)
- Extended coverage for late payments
10. Liability Insurance
For companies in the plastics sector, liability insurance is an essential insurance coverage as it shields them from monetary damages resulting from lawsuits claiming carelessness or mistakes.
What does it cover?
- Claims for bodily harm and property damage brought by third parties (such as clients or guests) who sustain injuries or lose property due to the plastic company’s operations are covered.
- Legal defence costs: Covers lawyer fees and other legal expenses incurred in defending a lawsuit, even if unsuccessful.
What it doesn’t cover?
- Intentional wrongdoing: Liability insurance doesn’t cover damages from deliberate negligence or misconduct.
- Pollution: Pollution liability typically requires separate coverage.
- Employee injuries: Workers’ compensation insurance covers employee work-related injuries.
Additional coverage available for an extra premium:
- Product liability insurance: Protects against claims alleging harm caused by defective plastic products.
- Completed operations and product liability: Covers claims arising from products after they’ve been sold and completed.
Summary – The plastic industry faces many risks, from injuring people with faulty products to polluting the environment. Having the right insurance can protect these businesses from financial losses. Some key types of insurance they need include general liability, worker’s compensation, property damage, and directors and officers’ liability. In addition, they may want to consider health insurance, accidental injury insurance, and life insurance for their employees.
