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STOCK PROTECTION THAT HELPS YOU TAKE OFF
Why Stock & WIP Insurance Is Critical in Plastics
Plastic manufacturing businesses often hold significant stock values — sometimes more than the plant itself. Resin and additives can spike in price, sheet stock can be bulky, and work-in-progress (WIP) can represent substantial value when you’re mid-run on a customer programme. Add finished goods, packaging, and customer-owned materials and you can easily have a six- or seven-figure stock exposure on site.
A single incident — fire, smoke damage, flood, theft, sprinkler activation or escape of water — can destroy raw materials and WIP. And because plastics stock is often stored in high-bay racking or near production lines, it can be exposed to both fire spread and operational hazards.
Insure24 helps plastic manufacturers structure stock and WIP cover so it reflects peak stock levels, seasonal buying, customer-owned materials, and the real cost of replacing stock at today’s prices.
What Counts as Stock, Raw Materials & Work-in-Progress?
In insurance terms, “stock” can include raw materials, WIP and finished goods — but definitions vary by insurer and policy schedule. For plastic manufacturing, it’s important the policy reflects the reality of your inventory categories and where they are stored.
If you hold customer-owned materials, consignment stock, or customer-owned packaging, you should also confirm whether these are included and under what conditions. Many businesses only discover gaps when a customer asks for reimbursement after an incident.
The right structure typically sits within your property insurance programme (material damage), with stock and WIP values declared separately and with correct location details.
Examples of Insurable Items
- Polymer resin (virgin and recycled), masterbatch and additives
- Plastic sheet stock (PET/RPET, ABS, HIPS, PP, PVC, acrylic)
- Packaging materials, labels, cartons and pallets
- Work-in-progress on production lines and in quarantine areas
- Finished goods awaiting shipment
- Customer-owned materials and consignment stock (if included)
Accurate valuations matter. Stock values can change fast with commodity pricing and buying cycles.
Common Insured Perils
- Fire, smoke and heat damage
- Flood and escape of water (subject to flood mapping and terms)
- Theft (security conditions may apply)
- Storm damage and impact
- Sprinkler leakage and accidental damage (wording dependent)
Some causes of loss are excluded or restricted (e.g., gradual deterioration, process defects, or certain contamination scenarios). Your broker should explain what is and isn’t covered.
Peak Stock Levels: The Most Common Underinsurance Problem
Many plastics businesses insure stock based on an “average” level — but claims are settled at the time of loss. If your site carries peak stock (for example, after bulk purchasing resin, building inventory for a new customer programme, or holding seasonal stock), underinsurance can significantly reduce claim payments.
A simple approach is to identify your highest realistic stock value in any 12-month period. That includes raw materials, WIP and finished goods at the same time — plus customer-owned materials if you’re responsible for them. If you have multiple locations, each location’s peak matters.
Many programmes use “seasonal increase” clauses or “stock declaration” mechanisms to better match changing levels. The right approach depends on insurer appetite and how frequently your stock changes.
What Drives Peak Stock in Plastics?
- Bulk resin purchases due to commodity price changes
- Long supplier lead times prompting higher safety stock
- Customer schedule changes and buffer stock requirements
- New programme launches with ramp-up inventory
- Finished goods build-up before shipping windows
If any of these happen in your business, it’s worth reviewing whether your stock sum insured truly reflects the maximum exposure.
Ways to Structure Stock Cover
- Fixed sum insured set to realistic peak value
- Seasonal increase percentages for known peaks
- Monthly stock declarations (premium adjusted to actual levels)
- Separate limits for raw materials vs finished goods (if appropriate)
- Separate cover for customer-owned materials and tools (if required)
We can help you choose a structure that suits your buying cycle and customer demands.
“We realised our peak stock was far higher than our policy limit — especially when resin prices moved. Adjusting the stock sum insured and adding a seasonal increase removed a major risk.”
Finance Manager, UK Plastic ManufacturerPROTECT YOURSELF
- Stock and WIP sums insured aligned to realistic peak values
- Structures for variable stock (seasonal increase or declarations)
- Clear inclusion of customer-owned materials where needed
- Advice on storage risk, housekeeping and insurer requirements
- Joined-up programme with BI so stock loss doesn’t become cashflow crisis
Insure24 helps plastic manufacturers arrange stock, raw materials and WIP insurance that matches real exposure. If you want to check your peak stock values, review policy wording, or align stock cover with BI, call 0330 127 2333 or request a quote online.
FREQUENTLY ASKED QUESTIONS
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What does stock and WIP insurance cover for a plastic manufacturer?
Stock insurance (usually within a property policy) can cover raw materials, work-in-progress and finished goods against insured perils like fire, flood and theft, subject to policy wording, security/protection conditions and declared sums insured.
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How should we value work-in-progress for insurance?
Valuation depends on policy wording. Some policies use cost price (materials plus labour/production cost) rather than selling price. For manufacturing, it’s important to understand how WIP and finished goods are valued and ensure the sum insured reflects that basis.
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Can we insure stock at peak levels if it changes throughout the year?
Yes. Options include setting the sum insured to a realistic peak value, adding a seasonal increase clause for known peaks, or using stock declaration policies where you report values (often monthly) and premium adjusts to actual levels.
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Does stock insurance cover customer-owned materials?
It can, but you must check the wording. Customer-owned materials may need to be specifically included under customers’ goods or a similar extension, with declared values and location details. Contracts often make you responsible for customer materials while on site.
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How does stock insurance link to business interruption cover?
Stock loss is a material damage claim, while business interruption covers the financial loss from disrupted trading. If you lose raw materials or WIP, BI may be triggered if the insured event causes disruption to your ability to produce and sell. Aligning stock values and BI sums insured helps avoid a cashflow gap.
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How do I get a quote for stock and WIP insurance?
Call 0330 127 2333 or request a quote online. We’ll ask about locations, stock categories and values (including peak levels), storage arrangements, fire protection, security, materials handled, and claims history to approach insurers.