Insurance planning for 2026: How plastics manufacturers can protect equipment, people and profitability

By Michael D. Zblewski 

Director of National Accounts – Safety and Industrial Hygiene Services, Sentry Insurance 

The plastics industry is changing fast — machines are smarter, supply chains tighter and risks more complex. The same technology that boosts efficiency also raises the stakes when something goes wrong. Add inflation, labor shortages and rising litigation costs, and recovery from downtime is harder and more expensive.  

That’s why 2026 is the year to re-examine how well your insurance protects what drives your business forward.  

In today’s environment, manufacturing insurance isn’t just a safety net — it can be a strategic tool to help maintain uptime, safeguard assets and stay competitive. A thoughtful review of your policies and risk-management approach can help identify gaps before they become costly surprises. 

Start with these key focus areas for 2026 to learn why equipment is the starting point for insurance planning for manufacturers: 

Machinery: Keeping your values up to date 

Machinery is the heartbeat of every plastics operation. Yet many businesses haven’t updated their equipment valuations in years, even as replacement costs, lead times and complexity have surged. 

Automation, robotics and process control systems have made machinery faster and more precise but also more specialized and with new risks, while tariffs and material shortages have increased the cost of replacement parts. If a key extruder or molding line fails, long wait times for repair or replacement can bring production to a halt. 

Ask yourself: 

• When did you last review your equipment replacement values? Would your current insurance policy limits cover the true cost of replacing a full production line today? 

• Do you have equipment breakdown insurance that reflects newer risks from automation, robotics or control systems? 

• Have you factored in extended lead times or hard-to-source parts? Both are realities in today’s marketplace. Business interruption coverage should reflect realistic downtime scenarios. 

• Do you have a contingency plan if a critical machine goes down? Could another facility or partner help maintain partial production? 

Even minor underinsurance on key equipment can trigger costly ripple effects — not just in repair expenses, but also in missed orders and strained customer relationships. The right insurance coverage, informed by current valuations and realistic downtime projections, can help maintain stability when the unexpected hits. 

Technology: Addressing new vulnerabilities 

Automation, robotics and digital upgrades continue to reshape the plastics industry. Smart sensors, Supervisory Control and Data Acquisition (SCADA) and Manufacturing Execution System (MES) systems, and artificial intelligence (AI)-based production scheduling drive efficiency and precision — but they also introduce new operational and cyber risks. 

A cyberattack that locks up your production systems or compromises machine data can halt operations just as quickly as a physical breakdown. The question is whether your insurance coverage recognizes that reality. 

When reviewing policies, ask your agent or insurer whether:  

• Your cyber liability coverage includes cyber-physical incidents, such as attacks on connected machinery or controls. 

• You have protection against programming or automation errors. 

• There are overlaps or gaps between your cyber and professional liability (Errors and Omissions) policies. 

• The agent or insurer can help model the potential impact of a ransomware event on your production and customer commitments. 

These aren’t hypothetical risks. In 2024, manufacturing was the second-most-targeted industry for ransomware attacks behind commercial services, according to the U.S. Cyber Threat Intelligence Integration Center. That’s why it’s critical to align your cyber coverage with your connected operations. The ongoing integration of digital and manufacturing systems means a single breach can ripple through your entire operation — from order processing to molding line calibration. 

Consider this: Collaborate with your insurer and IT team to align cyber and equipment coverage. Daily backups, off-site data storage, and incident response planning help reduce risk — but insurance remains an essential backstop. 

Business interruption and supply chain risks: Planning for volatility 

Even as global trade stabilizes, supply chain challenges continue to disrupt plastics production. Tariffs on raw materials, resin shortages, extreme weather events and freight bottlenecks all increase the likelihood of production delays. 

Many companies underestimate how these disruptions translate into uncovered loss. Business-interruption insurance often covers direct physical damage but not the upstream or downstream consequences of supplier shutdowns or shipping delays. 

When planning for 2026, review with your insurer or agent how your policy defines “covered loss” and whether it includes: 

• Supplier-dependent interruption: Coverage for shutdowns caused by your key vendors or raw material providers. 

• Extended downtime: Coverage that accounts for longer rebuild or restock timelines due to global material shortages. 

• Utility interruptions: Power, HVAC or water outages that can compromise sensitive manufacturing processes. 

• Extreme weather events: Increasingly common storms and flooding can affect both your site and your suppliers. 

The average number of billion-dollar weather disasters in the U.S. has more than doubled over the past two decades. Talk to your insurer about how your policy accounts for climate-related disruptions — and how you can prepare accordingly. 

Labor and costs: Managing economic headwinds 

Tight labor markets, rising wages and inflation are squeezing manufacturers from every direction. Many are delaying equipment upgrades, extending machinery life cycles or increasing overtime, all of which can elevate risk. 

At the same time, an aging workforce and increased use of contract labor are changing workers’ compensation exposure profiles. Longer shifts and inexperienced operators often contribute to higher injury rates and potential liability. 

Work through these questions with your agent or insurer:  

• Does your workers’ compensation policy reflect your actual headcount, overtime and contractor mix? 

• Does your insurer offer safety program credits and, if so, are you taking advantage of them? 

• Are you investing in ergonomic or preventive safety training to offset labor shortages or skill gaps?  

• How can your company learn about its top injury drivers from a loss analysis by your insurance provider, and what resources does your insurer have to help you reduce risks? 

Insurance can’t solve workforce challenges, but it can help reduce cost volatility. Partnering with your insurance provider or agent to benchmark safety performance and identify premium-reducing improvements can yield measurable returns, both in lower claims and improved productivity. 

Legal and compliance: Adapting to new pressures 

Plastics manufacturers face an evolving regulatory landscape. Stricter oversight of emissions, workplace safety and materials — especially around recycled or bio-based plastics — is increasing liability exposure. 

Meanwhile, multi-million-dollar jury award verdicts and rising legal costs across industries are pushing liability insurance rates upward. Manufacturers using experimental materials or expanding into new product lines should confirm that their coverage matches their risk profile. 

When reviewing your policies, ask your agent or insurer: 

• Does this coverage account for new or experimental materials and potential regulatory shutdowns? 

• Does it provide enough umbrella or excess liability coverage to help protect against large verdicts? 

It’s also important to closely review vendor contracts to ensure responsibilities and liabilities are clearly defined. Regulatory compliance isn’t static. As standards evolve, so should your coverage and documentation. Your insurer can help assess where you might face exposure and advise on ways to mitigate it through both process improvements and policy adjustments. 

Use renewal season as a strategic window 

For many manufacturers, insurance renewal happens on autopilot: Update the paperwork, sign the documents and move on. But with the pace of change in manufacturing, that’s a missed opportunity. 

Treat your next renewal as a strategic planning moment. Invite your insurer or agent for a plant tour. Walk through equipment changes, automation investments and supply chain dependencies.  

Discuss: 

• Planned equipment upgrades or retrofits. 

• Automation and robotics expansions. 

• Reshoring or supplier diversification initiatives. 

• New Environmental, Social and Governance (ESG) or compliance goals. 

By aligning your 2026 insurance planning with both your current operations and your short- and long-term goals, you’ll be better positioned to prevent gaps and ensure coverage keeps pace with your business’s evolution. 

Insurance as an asset, not an expense 

The best-run manufacturers know that when insurance is used strategically, it protects uptime, stabilizes costs and supports long-term profitability. 

Take the time to review your policies through the lens of how your business has changed and where it’s going. Confirm that equipment valuations, cyber protections and liability limits match today’s realities, not yesterday’s assumptions. 

Now is the time to speak with your insurer, and to adjust your coverage to match your manufacturing business goals in 2026.