Canada’s manufacturing sector has weathered its share of challenges in recent years.
Beyond the disruptive impact of the COVID-19 pandemic, the sector has continued to grapple with issues like product scarcity, port congestion, and labour shortages.
“The cost of doing business is greater than it was yesterday,” Kyle Meadus, manager of commercial underwriting at Sovereign Insurance, told Insurance Business in a special report.
“[There are issues with] port congestion; the supply chain has been complex and disruptive, and it will continue to be an issue for global manufacturers in getting their products across the world.”
Among manufacturers' difficulties, the shortage of skilled labour stands out as a particularly pronounced concern.
A survey conducted in 2022 revealed that Canadian manufacturers incurred $7.2 billion in losses due to lost or turned-down contracts and production delays caused by labour shortages.
In such an environment, Meadus said insurance brokers play a pivotal role in aiding manufacturers and ensuring that they possess adequate insurance coverage to mitigate risks that could potentially amplify costs down the line.
He said that the intricacies of a manufacturer’s operation begin at the broker level, stressing that brokers serve as the bridge between manufacturers and insurers.
“It’s the broker’s job to identify the coverage concerns, gaps in coverage, or the needs of the business, and then relay that to the insurer,” Meadus said.
He noted that brokers must help manufacturers find partners that align with their business and insurance needs.
“Once the insurer has been selected, the insurer will work with risk engineering, along with the broker and the insured, to understand the business, minimize risks, and see if the products align with what the customer truly wants,” Meadus said.
Learn more about Sovereign Insurance and Kyle Meadus’ insights on Canada’s manufacturing sector by reading the full report.
