Severe weather and inflation: How to prepare your plastics business

May 23, 2023
Plastics manufacturers can mitigate the risk to their employees and business, according to a Sentry Insurance expert.

By Brett Hoopingarner

Sentry Insurance

Throughout the country, severe weather events are worsening and happening more often, and the plastic manufacturing industry’s not immune. Severe weather events exceeding $1 billion in damages have more than doubled in the past three years, according to the National Oceanic and Atmospheric Administration (NOAA).

With this trend expected to continue, manufacturers need to take steps to prepare for these events to help mitigate the risk to your employees and business. While you’re not able to prevent severe weather from occurring, there are ways to help minimize damage to your facilities, equipment and products, and to ensure your business is able to recover should the unthinkable happen.

As an insurance underwriter, I’ve seen the damage severe weather can cause. To help you better prepare, I’ve compiled these emergency preparedness and risk management best practices. Your risks, however, will be unique, so consult your insurer and local experts to help you develop a plan that best suits your business.

Plan for emergencies

One of the most important things you can do is develop a comprehensive emergency plan. This plan should include steps to take before, during and after a severe weather event. It should also identify the resources that will be needed, such as personnel, equipment and supplies.

The plan should also do the following:

  • Identify potential risks. This includes considering the type of severe weather that is most common in your area, as well as the specific vulnerabilities of your facilities.
  • Protect facilities and equipment. Ensure your facilities are properly protected from the elements. This may include installing storm windows and doors, reinforcing roofs, and elevating and covering equipment — including rooftop HVAC systems. It’s also important to secure materials and products that could be damaged by water or wind.
  • Identify critical functions. Your plan should identify critical functions that need to be maintained during and after a severe weather event, and resources that will be needed to keep these functions running, such as backup power and telecommunications.
  • Communicate with employees. It’s important your employees know the risks of severe weather and your plans to mitigate them. They should also know what to do if severe weather strikes.
  • Build resilience, or business continuity, into your plan

In addition to physical preparations, plastics manufacturers also need to develop a business continuity plan. You likely have specialized equipment and supplies. What happens if they get damaged by severe weather and your production grinds to a halt? Every lost hour or day would impact your bottom line.

A business continuity plan can help protect your employees’ livelihoods and aid in your business’ recovery in the event of a severe weather catastrophe, like a tornado, or even a roof collapse from heavy snow. Business income insurance can help you pay for overhead and employee wages while you rebuild or replace equipment and supplies.

Flood insurance may also further protect your business. It’s important to speak to your agent/insurance company to see what’s available for your situation.

Supply chain and labor issues mean it could take longer — six months to a year or more — to replace equipment and rebuild facilities, which can lead to lost revenue. Business income insurance can cover those things and even help you recoup lost profits. Extra expense coverage can help you cover costs incurred to get your operations back up and running again, in your current location or a temporary one.

If businesses are unable to cover months of expenses while they recover, they may never reopen. In fact, historically, 25 percent of businesses don’t recover following a disaster, according to the Federal Emergency Management Agency (FEMA).

By protecting equipment and having a business continuity plan in place, you can reduce the risk of severe weather events disrupting your operations or preventing your business from fully recovering.

Reassess your property valuations

Before severe weather strikes, consider whether your business, equipment and supplies are insured to value. With the recent record inflation, it’ll cost more to repair or replace your equipment, facilities and materials.

To avoid being underinsured, talk with your insurer and update your property valuations to eliminate any gaps. You may also want to consider adding an inflation guard provision, which automatically increases the value of your insured property, at a percentage you set, to compensate for rising costs throughout your policy term. 

Learn more

Here are some additional resources that plastics manufacturers can use to prepare for severe weather:

  • The FEMA website provides information on disaster preparedness and recovery. Your state’s emergency management organization may also offer resources specific to your region.
  • The American Red Cross website provides information on disaster preparedness and first aid, including tips for your employees on how to make a plan for their families.
  • The National Weather Service (NWS) website provides information on severe weather events and preparedness.

By taking steps to prepare for severe weather, you can help reduce the risk of disruptions to your operations while helping protect your employees and assets. These are just tips. Be sure to talk with your insurer and local experts to develop a plan that suits your specific needs.

About the author

Brett Hoopingarner is the director of underwriting for Sentry Insurance. Sentry provides property, casualty, life insurance and retirement products to the plastics machinery and manufacturing industry. Learn more at