Plastics and Rubber Processing Insurance

Underwriters look at a plastics processor and see a quantity of fuel under a roof, and everything about the placement follows from how that fuel is arranged.

Polymer in bags, octabins and silos, work in progress beside machines, finished stock in a warehouse, packaging, and the machines' own hydraulic oil combine into a fire load that behaves differently from most manufacturing. Ignition sources are present everywhere: heater bands and barrels running at temperature, hydraulics, electrical distribution, granulators, and hot work during maintenance. Once established, the fire is hot and fast, the smoke is dense and oily, and the contamination reaches offices and stock in parts of the building the fire never got to.

So the controls an insurer wants to see are about separation and detection rather than firefighting. Raw material and finished stock separated from production by compartmentation rather than by distance in an open shed, stock heights and aisle widths that suit the sprinkler design if there is one, housekeeping that keeps regrind and dust off machines and floors, hot work under permit with the area cleared, thermal inspection of electrical distribution, and alarm monitoring so a night time fire is attended rather than discovered. A processor who can describe compartmentation has a far better placement than one who cannot.

The item most likely to be undervalued in a plastics policy is the tooling, and it is frequently the item that decides whether the business survives.

A mould tool represents months of lead time and a great deal of money, is often unique, and in many cases belongs to the customer rather than to the processor. A fire that destroys a tool store removes not only an asset but the ability to make the parts at all, and the replacement lead time is measured in months during which the customer finds somebody else. Where tools belong to customers, the processor is responsible for them while they are on site, and that responsibility is frequently not declared on the policy because the tools are not the processor's property and so do not appear in the asset register.

So the actions are specific. Value tooling properly and declare it, including customers' tools held on your behalf, keep a register with values and ownership rather than discovering both after a fire, consider where tools are stored since a separate compartment or a tool store away from production changes the outcome, and check the business interruption period allows for re-tooling and not only rebuilding. For high value or sole source tools, a duplicate or a drawing and data package held off site is cheap insurance in its own right.

A processed component does not stay with the processor, which is what makes the products exposure in this sector larger than the contract values suggest.

A moulded or extruded part goes to a customer, gets assembled into their product, and is distributed. By the time a problem appears, the parts are in the field, in multiple assemblies, across however many weeks of production. The causes are recognisable: wrong material or grade, a regrind percentage outside specification, a contaminated batch, an additive or masterbatch error, a tool worn beyond tolerance, or a process setting drift that produced parts that look correct and are weak. Any of those can affect everything made between two dates.

So traceability is the thing that bounds the claim, and it is the single most valuable record in this business. Material batch numbers recorded against production runs and despatches, regrind use recorded as a percentage, process parameters logged so a drift can be dated, inspection results retained, and despatch records that connect a batch to a customer and a date. With those, a problem is one batch to one customer. Without them, it is everything you have supplied, and the difference is an existential one rather than a matter of degree.

The injury risk in plastics processing is concentrated in a small number of places, and the machines are not forgiving.

An injection moulding machine closes its platens with a force measured in tonnes, an extruder runs melt at several hundred degrees, a granulator contains rotating knives, and presses and guillotines close on whatever is in them. The recognised incidents are an operator reaching into the mould area while the machine is on cycle with a gate interlock defeated, a hand or arm into a granulator, burns from melt or from purging, and entanglement at haul off and winding equipment. Almost all of them involve a guard or interlock that was bypassed, usually to clear a stuck part or to speed a cycle.

So the controls are the same as any machinery operation and insurers ask about them directly. Gate interlocks and safety devices never bypassed, with a rule that a machine with a defeated interlock is stopped rather than run, purging under controlled conditions with the correct protection, granulators interlocked and isolated for clearing, lock off for any work inside a machine rather than reliance on a cycle stop, and training that covers the specific machine rather than moulding generally. A processor who can evidence interlock testing is presenting a managed operation.

Fire load, tooling and the indemnity period decide this placement. We are an FCA regulated broker and will not tell you we are the best choice. These are the questions that decide it.