December 10, 2025 Your 2026 Roadmap for Manufacturing Insurance

Key steps manufacturers can take to manage cost, reduce risk, and strengthen insurance coverage heading into the 2026 renewal cycle.

By Dan Grant, senior director of loss control for Sentry®

As manufacturers plan for 2026, many of the issues identified by executives last year—economic uncertainty, supply chain issues, labor shortages, and rising litigation—continue to exert a significant toll on companies and are likely to do so in the year ahead.

Thoughtful consideration of your company’s insurance needs is always important, and may be even more so, during times of ongoing challenges. Your renewal is a strategic checkpoint to reassess operational changes, equipment investments, workforce shifts, and emerging exposures.

With the right preparation and collaboration, renewal is a chance to work with your insurer or agent to strengthen your business resilience and protect performance.

3 key trends shaping manufacturing risk in 2026

1. Economic and supply-chain volatility

Manufacturers are entering 2026 amidst continued uncertainty around tariffs, sourcing, and global demand. Shifting tariff structures increase the cost of materials and components, while trade tensions and geopolitical instability create ongoing unpredictability in production planning.

• Tariffs and sourcing volatility. Many manufacturers now rely on diversified supplier networks, but this brings its own challenges. Changes in tariff rules, adjustments in duty rates, and overseas production delays complicate cost forecasting and increase the risk of unplanned expenses.
  
  
• Longer lead times and business interruption exposure. Supply chain delays—whether caused by parts shortages, port congestion, or upstream labor disruptions—extend downtime when equipment fails. If a part replacement that once arrived in two days now takes two weeks, financial exposure exponentially grows. Adopting a formal business continuity plan will help you better anticipate these setbacks. Business interruption coverage should align with realistic recovery timelines, not historic patterns or assumptions.
  
  
• Inflationary pressures on asset values. Persistent inflation continues to influence the replacement cost of buildings, machinery, tooling, and spare parts. Undervalued assets remain one of the most common drivers of underinsurance in manufacturing, resulting in losses that exceed policy limits. Renewal is the time to recalibrate values to reflect current market realities.

2. Labor and workforce challenges

Manufacturers continue to face hiring and retention obstacles that directly influence safety, productivity, and insurance costs.

• Skilled labor shortages. Open roles in machining, welding, electrical work, and maintenance remain difficult to fill. This often leads to higher overtime, fatigue, and gaps in training, which are conditions that correlate with higher injury frequency.
• Turnover pressures. When experienced workers leave, new employees enter roles without the same familiarity with equipment, workflow, or safety protocols. Industry data consistently show that first-year employees sustain injuries at higher rates.
• Evolving safety risks. New manufacturing processes, robotics integration, and ergonomic strain remain contributors to musculoskeletal injuries and repetitive motion claims. Each of these trends should be considered when reviewing workers’ compensation and liability coverage.

3. Escalating litigation and liability exposure

Sentry found, in its 2025 C-Suite Stress Index, that 72% of executives worry about the financial impact of multimillion-dollar jury verdicts. Factors driving litigation risk include:

• Product liability concerns in highly technical sectors
• Motor vehicle accidents involving commercial fleets
• Contractual disputes in complex supply chains
• Workplace injuries where attorneys aggressively pursue damages

This environment is motivating many manufacturers to evaluate umbrella coverage, reassess limits, and strengthen company policies and documentation practices that help defend against claims.

Manufacturing-specific risk factors to evaluate before renewal

No two manufacturers face the same set of exposures. Company size, production methods, technology adoption, fleet operations, and geography all shape risk. Before renewal discussions begin, manufacturers should take a comprehensive look at the following areas.

Commercial Auto

Rising bodily injury costs and multimillion-dollar jury verdicts have put pressure on commercial auto premiums across the country. Manufacturers with any over the road vehicles used for delivery or sales should assess:

• Driver qualification and training programs
• Use of telematics for safety insights and real-time monitoring
• Vehicle maintenance practices
• Exposure from driver shortages or reliance on temporary drivers

A hypothetical example: Consider a manufacturer that begins using data from telematics to adjust driver behavior and training after several near-miss incidents. Over the next six months, the data show a significant reduction in hard-braking events, allowing the company to demonstrate measurable safety improvements during renewal discussions.

Technology, Automation, and Cybersecurity

As factories become increasingly connected, technology introduces both opportunity and exposure.

• IoT-enabled equipment expands productivity but increases cyber vulnerability.
• Robotics and automation improve efficiency, yet breakdowns can halt production if maintenance cycles are misaligned.
• AI-powered predictive maintenance reduces downtime but adds new reliance on digital infrastructure.
• Digital supply-chain platforms create efficiencies—and new points of failure.

Manufacturers should review cyber coverage, equipment breakdown policies, and contingent business interruption coverage to ensure protection matches the level of technology embedded in operations.

Geographic and Weather-Driven Hazards

Location-based exposures—from tornadoes in the Central Plains to severe flooding in coastal regions to wildfires in the West—remain a primary driver of catastrophic loss.

Recent years show increasingly frequent convective storms and more expensive losses. Before renewal, evaluate building vulnerability, roof condition, and protective measures such as fire mitigation, wind-resistant upgrades, and hail guards.

Evolving Workplace Safety Risks

Manufacturing processes aren’t static. Safety considerations must evolve alongside operational changes, such as:

• Ergonomic risks from higher volume
• Increased automation requiring new lockout/tagout disciplines
• New materials with different handling requirements
• Changes in OSHA enforcement priorities

Ensure your insurer has full visibility into new processes, equipment additions, or production expansions.

Building Contents and Materials

Manufacturers with high-value equipment—CNC machines, robotics, specialized tooling—should ensure replacement cost values reflect current market pricing to prevent being underinsured. Inventory volatility, particularly for specialty materials or component parts, should also be reconciled in advance of renewal.

The value of a collaborative approach with your insurer

A proactive dialogue with your insurance partner is the most effective way to ensure your coverage adapts to today’s operational realities.

• Begin conversations early. If you added a second shift, opened a new warehouse, implemented automation, or adjusted supplier networks, among other changes, discuss these before renewal. Early notice helps your insurer assess risk accurately and recommend protections.
• Leverage risk-engineering insights. Many manufacturers underuse technical expertise available through their insurer. Site assessments, equipment maintenance consultations, and safety program reviews can uncover vulnerabilities and provide actionable recommendations.
• Validate asset values. Replacement costs for buildings, machinery, and parts have risen significantly. Ensure your insurance limits reflect true rebuild or replacement values—not outdated estimates.
• Align coverage with growth. If your company has expanded production lines, added fleet vehicles, or adopted new technology, coverage should evolve accordingly. A collaborative approach ensures policies keep pace with business strategy.
• Build long-term stability. When insurers understand your operations deeply, they can design programs that support your long-term risk reduction.

Renewal as an opportunity, not an obligation

The year ahead brings plenty of complexity for manufacturers—but also opportunities. Challenges will continue, but so will opportunities for modernization, operational growth, and business resilience. A thoughtful renewal strategy can be the steadying force that helps make that happen.

By starting early, taking a close look at exposures, and staying connected with your insurance partner, manufacturers can put themselves in a stronger position to manage rising costs, navigate new risks, and build long-term resilience. Renewal season isn’t just another task on the calendar—it’s a key moment to protect your business and set the stage for your next phase of growth.

About the Author
Dan Grant is senior director of loss control for Sentry, which insures manufacturers throughout the United States, and is part of one of the largest and most financially secure mutual insurance groups in the United States, holding an A+ (Superior) Financial Strength Rating from AM Best as of June 2025.

Subscribe to Industry Today