NIBA / Special Feature
Timmins says, “We recently looked at the risk for a manufacturer whose products are used with explosives in blasting activities. Those terms, blasting and explosives, no doubt strike fear into the hearts of many a liability underwriter, however it’s important to understand the various elements and products in the process. For example, a manufacturer of blasting caps that initiate detonation may have a vastly different risk profile to the manufacturer of the actual explosives.”
“A BCP only works if people know it exists. Review and update it often, and make sure the whole team understands it. A document hidden in a shared drive won’t help you when facing a potential disaster situation.” Finianos says it’s essential those plans are kept up to date – otherwise they risk becoming meaningless. “Regular testing, employee training, and continuous plan updates are not conducted and implemented on a regular basis; the plan is another useless document. Training, revisiting and updating the plan are critical to ensuring a business can respond effectively to disruptions and resume critical operations quickly.” Timmins of Berkley Insurance Australia says that if the COVID pandemic taught us anything it’s that things can change very quickly – and anticipating potential changes and being able to adapt to them quickly is imperative in maintaining a successful business. “Advances in technology such as AI and automation mean that many manufacturers are not as reliant on a physical workforce anymore, but are now more susceptible to cyber attacks, IT outages or other issues, so any business continuity plans should address those potential events. “Additionally, disruptions in the supply chain due to things like global pandemic, adverse weather events, and social and political upheaval can and have had major impacts on many manufacturing risks. “Supply chain issues affect not only the sourcing of material used in the manufacturing of products, but can also affect the distribution of the insured’s goods, which can have flow-on effects if they are not able to meet contractual obligations to their customers.
How AI is Changing Manufacturing Risk
As you might imagine, tech, AI and cyber are changing the face of manufacturing, just as they are in many other sectors. And, that is bringing with it a string of new risks – some predictable, others less so. Finianos says, “I came across a new manufacturing business project that will be established next year in NSW. Ninety-five per cent of its production line will be digitalised. AI will be running the show, while the owners will be observing the business operation from their smartphones in real time. “I just could not believe that we are really there – humans are no longer required in production lines. Massive warehouses full of expensive machinery and state-of-the- art systems are running alone. “The question playing on my mind was, ‘Who is going to insure such a massive cyber exposure?’. From temperature controls, smart communication, web of ongoing data flow and formulas, to everything else that needs to considered, it’s all being powered by AI.” That future – which seemed the storyline of a sci-fi movie just a decade ago – is very much here today. And, over the coming months and years, it is going to create even more opportunities for brokers to cement that place as a manufacturing business’s invaluable, trusted adviser.
“Any contingency plans should therefore also address potential alternative suppliers or alternative materials that can be used, as well as contingency plans for distributing the insured’s own products.”
54 / INSURANCE ADVISER DECEMBER 2025
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