Food

Automated Production Lines & Machinery

As you compete with global pressures from cheaper foreign competitors your investment into advanced machinery has increased which has changed the nature of your production line.

As such you will have a number of challenges:-

Machinery Movement

You may look to reorganise your production line as the advancements of new machinery becomes available as such you may be moving around expensive items of kit. In this case, you should always have machinery movement insurance in place if you are moving your items around. You can arrange this on a one-off basis or an annual basis.

Health & Safety

Food Manufacturing has embraced automated production lines, but you shouldn’t ignore the health and safety regime which is paramount to protecting firstly your team and secondly your factory.

Training

With advancements in the technology, the need for training becomes essential in the food manufacturing industry. If you arrange training for people outside of your company, you may need to have professional indemnity insurance to cover you for any claims against the advice and teaching you have provided.

Food Manufacturing Cyber Insurance

The number one threat to any business reliant on IT to deliver a product. Making sure you have assessed your potential cyber risks is essential to running a modern business.

Below are a few things to look out for when looking at insuring your Cyber exposures.

Cyber crime

Usually you will buy in raw materials in enough quantity to keep your factory running. One area cyber criminals are targeting is to look at social engineering where they pretend to be your supplier hacking into your emails to copy invoices and change bank details. You then pay them and are at a financial loss as your bank won’t refund any money because you have physically made a payment to them. Make sure you have a verification process in place but then also a Cyber Crime Insurance policy to fully protect your business.

Production interruption

If a cyber criminal hacks into your system and shuts down your production line it could lead to a financial loss as you can’t service the orders or you spend additional time in catching up on the production. With this increased automation in the Food Industry we see this as an ever-increasing risk and one that is key to include within your food manufacturing cyber insurance.

Your biggest IT weakness

Your people as they click on the phishing links and respond to emails. Ask your IT provider to do some tests to try and catch your staff out. Alternatively, ask your Cyber Insurance provider to conduct some training, it’s usually free as part of the policy to help minimise claims.

Stock levels

The move to just in time delivery systems allow you to keep stock levels to a minimum. However, there may be scenarios where your stock levels go above the normal parameters such as:

Large orders

You may need to retain more stock and raw materials to service a large order, you can usually flex your stock levels for a short period of time.

Off-site warehouse

You may have a regular batch of orders as such want to free up production lines so stock up on your regular products in an off-site warehouse. You can normally float cover across multiple sites allowing you to have confidence that you don’t need to tell insurers every time you move things around.

Deterioration of stock

If you keep your finished goods in a refrigerated environment and something happens that causes the storage to malfunction it could cause damage to all of your produced stock.

Keeping a regular maintenance schedule in place is one way to mitigate this but you will also need to assess the insurance covers available dependent on what food you are storing and producing. You may be able to extend your policy to cover this scenario leaving you with ultimate peace of mind.

Stock at customer site

You may store stock at a distributor, wholesaler or a customer’s property. If they are responsible for the stock, then make sure they have noted you as an interested party and have ‘goods in trust’ cover.

Do you know who is responsible when transporting your finished product?

Once you have finished your production, you will usually batch up and ship out your food produce. Have you considered your transportation conditions and levels of stock being shipped at any one time?

Check your contract with your client and just make sure you are both clear on where the responsibility lies to insure the food in transportation. It is often presumed it’s the other party and often forgotten about, leaving the goods uninsured.

A few scenarios could be:-

  1.   You are responsible from door to door
  2.   You are responsible from door to a port
  3. They are responsible on pick up once loaded to transportation

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