We analyze the risk of the entire manufacturing process, from the inputs our clients need to produce their products to the potential issues that they might face years after what they produce has been sold. We also anticipate the risks of potential disruptions to their production processes and work with our clients to prepare insurance and risk management solutions that are appropriate for their businesses.
Traditional insurance solutions are very good at dealing with traditional dangers. But the kinds of things that make or break a business, particularly a manufacturing one, tend to be less dramatic but no less catastrophic. For example, if an input is delayed for several days and an order goes unfilled, is it reasonable to budget the loss as simply lost revenue? What long-term effects does a damaged relationship with the customer have on the business? We take a broader, non-traditional approach to insurance and risk management that anticipates and valuates these issues so you have control over the outcome.
High impact areas we review:
- Valuation of inventory for loss
- Long-tail product liability exposure
- Dependent business interruption
- Cyber liability
- Industrial control system cyber exposures
- Workers’ Compensation and Experience Modification analysis
- Insurance issues of regulatory compliance
Industry Insights with Mitch
We’ve seen just about everything you can imagine, and then more. Here are a few examples of what we’ve accomplished for our clients.
Case Study – East Coast Manufacturer
A private equity client was negotiating the purchase of a $300 million manufacturer of a common electronic device. This device has a long lifespan, and sometimes contributed to very large insurance claims. Since the company’s insurance program had a large deductible, we were concerned that our client, the buyer, would be held responsible for claims arising from products manufactured before the acquisition. After collecting and analyzing claims and manufacturing data during our due diligence process, our team was able to support our client’s contract negotiations by obtaining a valuable indemnification from the seller. This indemnification saved our client millions of dollars in claims costs during the years following their acquisition. Since then, we’ve assisted our client with negotiating lower policy deductibles, and help them manage and reduce their claims.
Case Study – International Chemical Manufacturer
Our client, an international chemical and plastics manufacturer, was purchasing a large plant in Canada for over $100 million. The seller was a Fortune 500 company with an internal risk-management and self-insurance program, and as negotiations continued, it became evident that there was a problem with plant water supply and fire protection. Potential insurers were reluctant to provide coverage, and the necessary improvements would cost millions of dollars. We eased the insurance companies’ concerns by helping our client develop a program to improve plant protection, and we safeguarded our client by supporting their negotiations with the seller about who would pay for the work. At the end of the process, the seller paid much of the cost of the upgrades, the insurance carriers were satisfied with the way our client was going to address the problem, and the purchase was successfully closed.