Manufacturers of cardboard, cardboard boxes and packaging products play a vital role in the UK supply chain – from food and drink packaging to e-commerce distribution. Yet despite their importance, many packaging businesses face significant challenges when it comes to arranging suitable insurance.
At Champion Insurance Group, we regularly work with manufacturers who find the insurance market for their sector to be complex, expensive and sometimes restrictive. Understanding why that is – and how to navigate it – is key to protecting your business effectively.
The fire and combustibility risk
Perhaps the most obvious challenge for cardboard and packaging manufacturers is the fire risk. Paper and cardboard are highly combustible materials, and many insurers are cautious about providing cover for premises where these are stored or processed.
Common risk factors include:
- High volumes of combustible stock
- Dust accumulation from cutting and folding machinery
- Use of glues and inks
- Older buildings with limited fire compartmentation
To secure competitive terms, insurers will expect to see strong risk management controls in place – such as automatic fire detection systems, sprinkler protection, regular cleaning regimes, and strict hot-work policies.
Machinery and equipment exposure
Packaging production relies on specialised machinery – from die-cutters and presses to gluing, folding, and printing equipment. Any breakdown or damage to these assets can cause major business interruption.
Insurers will look closely at:
- Maintenance schedules and service records
- Availability of spare parts
- Dependence on key pieces of equipment
Inadequate insurance can leave a business exposed to long production delays, contractual penalties and loss of customers. Machinery Breakdown and Business Interruption cover are essential components of a robust insurance programme.
Environmental and waste management issues
Waste handling and disposal present another challenge. Cardboard dust and scrap must be safely stored and regularly removed to prevent fire hazards and maintain compliance with environmental regulations.
Insurers are increasingly scrutinising:
- How waste is stored and segregated
- Proximity of skips and compactors to the main building
- Control measures for waste removal contractors
Poor waste management is one of the most common causes of declined insurance terms or increased premiums in this sector.
Liability and contractual exposures
Many packaging manufacturers supply products to strict specifications for large commercial clients. Errors in design, printing or sizing can lead to costly disputes or product recalls.
Essential covers to consider include:
- Products Liability Insurance – for injury or damage caused by supplied goods
- Product Recall Cover – where large production batches are affected
- Professional Indemnity Insurance – if your business provides design or artwork services
Understanding the contractual obligations you carry – and how your insurance responds – is vital to avoid unexpected gaps in protection.
Supply chain and business interruption
The packaging sector is heavily integrated with just-in-time supply chains. A fire, flood or machinery failure can have knock-on effects for customers relying on timely delivery.
Insurers increasingly want to see detailed business continuity plans, alternative supplier arrangements and robust risk management strategies before offering cover.
Navigating a challenging insurance market
In recent years, many insurers have reduced their appetite for paper and packaging risks, leading to fewer options and higher premiums. Specialist brokers who understand the sector can help present your risk in the best possible light, ensuring underwriters see the quality of your controls and management approach.
Supporting the UK packaging industry
At Champion Insurance Group, we work with packaging and manufacturing businesses across the UK to arrange tailored insurance programmes that reflect the realities of the industry – balancing cost, cover and compliance.
Whether you manufacture cardboard boxes, corrugated packaging, or printed cartons, we can help you navigate this complex market and secure protection that stands up when you need it most.
Champion Insurance Group
Specialist insurance brokers for UK manufacturers
www.championinsure.co.uk
Call our specialist team on 03330 430 430, email Info@ChampionInsure.co.uk or request a quote at www.ChampionInsure.co.uk
