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Understanding the true risks for manufacturers

At a glance

  • Broker Steve Whetham from MCM Insurance believes that some manufacturers do not fully appreciate importance of good risk management
  • Health and safety should be seen as a constant evolving process for all manufacturers
  • Not enough public knowledge out there to understand emerging risks such as cyber and environmental challenges

Some manufacturers are still not aware of the value of insurance and good risk management practices when it comes to health and safety and emerging risks.

That is the view of Manchester-based broker Steve Whetham, who is Director of MCM Insurance.


“Manufacturers operate dangerous machinery, lift heavy loads and work with potentially harmful substances,” said Whetham. “And many operate multi-faceted plants, but few employees or managers really ever contemplate a serious accident happening.”

A good health and safety regime can lead to fewer work-related incidents, less downtime and less scrutiny from enforcing agencies. Not to mention the potential for winning new contracts.

“The better run manufacturers do not perceive health and safety as a chore or imposition and employ robust system-led management tools that support and drive consistency,” said Whetham.

“These businesses, who generally have more robust health and safety systems in place, are aware of the link between employee health and safety and general wellbeing, greater productivity and lower staff turnover.”

Unforeseen threats

Key principles to improve health and safety

Although no-one can prevent 100% of accidents, Zurich’s expert knowledge and expertise in health and safety matters can allow a manufacturer to run a safer and more successful business. To do this, manufacturers should follow these key principles:

  • Understand your business and the potential risks internally and externally
  • Senior management should be committed and show leadership towards health and safety matters
  • The appointment of competent assistance to help a manufacturer comply with health and safety
  • The adoption of a structured management approach for health and safety
  • The adequacy of general risk assessment
  • Get your paperwork in order when filling in RIDDOR reports
  • Have the market-leading employers’ liability insurance in place

Of course, health and safety is one area of risk that a manufacturing firm has a duty of care to its employees. But it is some of the emerging risks, such as the growing cyber threat and stricter environmental laws, which many manufacturers have not yet foreseen or addressed.

For instance, cyber crime is now estimated to cost businesses £300-£400 billion a year while the European Union’s Environmental Liability directive has introduced a ‘polluter pays’ principle that now makes polluters financially liable for the costs.

“Environmental legislation is still not widely understood by our clients and they don’t really understand appreciate the potential impact or likelihood of an ‘environmental’ incident,” said Whetham.

“I have also experienced a similar non-understanding around cyber risks. With the lack of knowledge clients need to be encouraged to engage in a discussion around these emerging risks.”

Appropriate cover could thus safeguard clients’ operations.

Whetham added: “With these emerging risks, clients are not necessarily aware of areas of risk forced upon them under the contracts they sign and are potentially uninsured.”

Image © Getty

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