Those who manage and underwrite risks for manufacturers are facing familiar risks with some challenging new twists.
With Workers' Compensation, the big shift is the medical component of costs exceeding indemnity costs—this after an extended period during which companies could materially cut their Workers' Comp expenses by focusing primarily on returning injured employees to work.
With Supply Chain risk, it's the realization that supply and upstream customer chains can be far more fragile than anticipated in a catastrophe.
Insurers have realized this, too. After an earthquake and tsunami devastated Japan last year, Contingent Business Interruption coverage of supply-chain interruptions is now tougher to procure.
Compounding the supply-chain problems is the additional need for Political Risk coverage as companies move some increasingly expensive manufacturing operations out of China to cheaper producers located in less politically stable countries.
And for food processors, the emerging challenge is a food-safety law that has given federal authorities sweeping new power to issue recalls—and has sparked a surge of interest in Product Recall protection.
In many of these cases, insurers have responded with either new or expanded coverage—insurance options that many buyers either are unaware of or are examining and have not decided whether to procure.
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