From construction through equipment installation and processing, the manufacturing industry requires effective risk management to ensure success and safety. Business owners must fully appreciate how to build the right risk management plan to protect the interests of owners, employees, consumers, and shareholders.

Mitigating Risks for Manufacturing Companies

Along with the challenges of meeting market and consumer demands and weathering fluctuations, manufacturers must navigate worker needs, operational goals, and regulatory compliance issues. Mitigating risk is a constant battle but one that can be won with appropriate strategies for identifying, assessing, measuring, minimizing, and monitoring potential threats with the guidance of a risk management attorney.

Supply chain disruptions are among the most difficult issues to overcome in the manufacturing industry.. Material and equipment shortages can result in expensive downtime and lost production, affecting both the company’s profits and workers’ hours, which  puts the entire operation at risk if the issue lasts too long.

Along with supply chain risks, other commonly identified risks for manufacturers include:

  • Cybersecurity: Cyberattacks and breaches can lead to the loss of intellectual property and trade secrets or interfere with quality processes, which could result in product liability concerns.
  • Operational risks: Disruptions from mechanical failure, control system malfunctions, or property damage can slow or stop production, impacting profits and logistics relationships.
  • Financial risks: It is vital to identify and protect against risky transactions and investments so market fluctuations do not affect your company’s stability.
  • Regulatory compliance: Failure to adhere to laws and regulations set by agencies such as OSHA, the Social Security Administration, the Department of Transportation, and others can result in substantial fines or lawsuits.
  • Mass tort litigation: Product liability and device-related litigation resulting in serious bodily injury and significant property damage has become commonplace, and manufacturers must promptly assess all available insurance coverage to protect their interests and avoid unnecessary exposure to the company’s bottom line.
  • Natural disasters: Natural events such as hurricanes, wildfires, or droughts could impact operational efforts.
  • Pollution and Environmental Exposure: often a byproduct of the manufacturing process, environmentally hazardous materials and pollution can expose = businesses to legal claims as well as regulatory enforcement and abatement actions from state and federal agencies.

Saxe Doernberger & Vita, P.C. is available for contract reviews, incorporating appropriate risk transfer language, implementation of critical risk management plans, and where necessary, pursuit of insurance coverage from insurance companies to protect your company’s assets. Contact us to schedule an insurance policy or contract review and begin better protecting your company’s interests today.