The Essential Guide to Packaging Company Insurance
Regardless of your packaging company’s specialization, your organization is heavily invested in packaging design, materials and components, containers, automation devices, packaging machinery, converting machinery and packaging makers and services. You also need to be aware of industry trends and societal pressures that affect your packaging company’s operations. And if all of that weren’t enough, there are also risks your company needs to mitigate to remain successful. We address some of the above concerns in this post.
The Canadian Ban on Single-Use Plastics, How Will Your Packaging Company be Affected?
If your packaging company produces plastic packaging, your company may be affected by the ban on single-use plastic in Canada. Canadian Packaging magazine’s article “List of single-use plastics to be banned in Canada by 2021” reports:
“The six items the Government proposes to ban are
- Grocery checkout bags
- Stir sticks
- Six-pack rings
- Plastic cutlery
- Food takeout containers made from hard-to-recycle plastics (like black plastic packaging)
In Canada, single-use plastics make up most of plastic litter that is found in freshwater environments and up to 15 billion plastic bags are used every year and close to 57 million straws are used daily.”
Environment and Climate Change Canada has also identified products that don’t currently meet the criteria to be included in the ban but have labelled them as problematic. For packaging companies and manufacturers of these products, finding alternative materials and solutions is advisable as the Canadian government may look to include them in future bans. These products include:
- bags, including:
- checkout bags
- produce and bulk food barrier bags
- garbage bags, and
- dry cleaning bags
- packaging not necessary for the protection of food or goods, including:
- produce stickers, and
- some films
- cosmetic and personal care products and packaging, including:
- cotton swab sticks
- flushable wipes, and
- disposable personal care items
- plastic packaging used in aquaculture and coastal industries (for example, strapping bands)
- food packaging, including:
- beverage bottles and caps
- snack food wrappers, and
- some films
- food packaging and service ware (for example, takeout containers and lids, plates, bowls and cups) made from problematic plastics, including:
- foamed plastics
- black plastic
- polyvinyl chloride (PVC)
- oxo-degradable plastic, or
- multiple (composite) materials including one or more plastics
- coffee pods
- plastics used in medical applications, including personal protective equipment such as:
- gowns, and
- cigarette filters
- contact lenses and packaging
- food service ware, including:
- hot and cold drink cups and lids
- stir sticks
- cutlery, and
- condiment portion cups and sachets
Liability Risks and Packaging Insurance Company Protection
Some liability risks that are common in the packaging industry and specific to packaging companies include:
- high chemical levels, delaminating and other production-line loss or damage that force manufacturers, especially food manufacturers, to issue a recall
- failing to meet packaging specifications that cause manufacturer delays
- packaging design flaws that cause consumer injuries
While the above scenarios could generally be covered with Errors & Omissions and Product Recall insurance, there are additional coverage we recommend that are designed to minimize the risks packaging companies including:
Commercial General Liability Insurance which protects your packaging design from legal claims of property damage, personal injury, libel/slander and false advertising. This kind of coverage can also include Product Liability Insurance.
Product Recall Insurance can cover the cost in a massive recall including wasted product, replacement costs, notification costs and brand rehabilitation expense.
Pollution Liability Insurance may be a necessary inclusion in your packaging company’s insurance coverage as it can protect your organization from the costs of litigation, fines and cleanup expense.
Property Insurance that protects your packaging company’s building, equipment, machinery, supplies, assets, etc., in case of perils such as fires, floods, windstorms, sewage backups and more. Your packaging company’s insurance coverage will also likely include:
- Business Interruption insurance to help you manage your business income after a disaster and
- Extra Expense insurance to help you a set up a location so you can restart your package manufacturing operations as quickly as possible to hit the product liability.
Boiler & Machinery Insurance / Equipment Breakdown Insurance which is insurance protection to cover the cost to repair or replace equipment breakdown and coverage for the lost stolen you experience because of equipment breakdown failure.
ALIGNED – We are Business Specialists, Advocates and Packaging Insurance Company Experts
Our ALIGNED advocates keep their fingers on the pulse of all commercial industries to know the challenges they face. We also work with the top commercial insurers in Canada and leverage our relationships, experience and purchasing power to advocate for the best rates on your behalf.
Other types of insurance we offer:
- Cargo insurance
- Umbrella insurance
- Property insurance
- Insurance for manufacturers