Photo: Dinesh Murali
A New Zealand insurance underwriting agency is providing an exclusive cover for manufacturers which are facing major challenges in relation to recall of contaminated food and beverage products.
About 40 manufactured food products have been recalled so far this year, up from 25 for all of last year, Delta Insurance casualty manager Dinesh Murali says.
Delta Insurance is a New Zealand based insurance provider and has an office in Singapore. They provide a range of specialty commercial insurance products.
The New Zealand manufacturing sector is experiencing strong growth and is a standout on the international stage. Annual merchandise exports from New Zealand are almost $49 billion, according to Statistics NZ.
Murali says manufacturing for the construction industry has grown by 9.5 percent while meat and dairy has jumped by 8.36 percent in the last year.
“Our New Zealand climate and abundant natural resources make food manufacturing a good strategic choice. We have a particular strength in food manufacturing, but we have also seen growth across non-food manufacturing as well.
“Across all manufacturing segments we regularly outsource manufacturing processes and source components from overseas suppliers and this supports an efficient global supply chain. More competition means increased innovation and creating products in new and more efficient ways. But this also poses new challenges and risks in relation to quality control.
“Outside the food sector, we are also seeing a major trend where manufacturers are embedding technology into items such as equipment and machinery with these products becoming connected to the “internet of things. This gives rise to risks such as cyber security which was not previously a concern for these items.
“Given the increased and evolving risks, Delta is providing manufacturing-risk cover for Kiwi companies which we believe is the most comprehensive coverage solution in New Zealand.
“This cover under one umbrella targets both food and non-food manufacturers and insures a range of manufacturing-specific risks including coverage for product recall due to product defects and food contamination, cover for pollution arising from manufacturing process and crisis management cover. It can also be packaged with other coverages such as cyber liability.
“If Kiwi manufacturers choose not to take this cover then they run the risk of potential losses being uninsured which would affect their balance sheet and could, in a worse-case scenario, result in the financial ruin of their business.
“Beyond the direct financial impact, they could also suffer significant reputational damage if they do not have the resources and expertise to be able to manage some of these critical issues, such as product recall of contaminated products,” Murali says.
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