Insurance risk experts are warning that manufacturers face rising exposure to business interruption losses as cyber incidents, extreme weather, and supply chain failures increasingly produce the same outcome: halted production and prolonged recovery periods.
At Smart Manufacturing Week at the Birmingham NEC this week, Zurich Resilience Solutions experts said the growing interconnection between digital systems, operational technology (OT), and global supplier networks is amplifying disruption risk across modern manufacturing environments.
Ray Lewis, Senior Technology and Cyber Risk Engineer at Zurich Resilience Solutions, said the distinction between different types of disruption is becoming less important than their financial impact.
“The cause very quickly becomes secondary,” he said. “It’s about the financial impact, how much revenue has stopped, how long that is going to last, and how quickly the business can realistically recover.”
Smart manufacturing: interconnected systems increasing exposure
In smart factories, where production relies on tightly integrated IT and OT systems, even short outages can rapidly escalate into full production stoppages. However, insurers warned that a key risk lies in recovery assumptions, rather than the initial disruption itself.
“There’s an expectation that systems will come back very quickly, that suppliers will recover quickly, and that customers will return immediately,” Lewis said. “In reality, that’s rarely how it plays out.”
He said cyber incidents are increasingly causing extended disruption due to system validation requirements and the time needed to restore operational confidence, even after technical recovery.
Kay Hargreaves, Senior Technology and Cyber Risk Engineer at Zurich Resilience Solutions, said supply chain dependency remains one of the most significant drivers of hidden exposure in manufacturing operations.
“A key supplier can be impacted for weeks, and even if your own site is untouched, production can still slow or stop entirely,” she said.
She added that organisations often underestimate recovery timelines once knock-on effects across logistics and customer demand are fully accounted for.
Jaguar Land Rover highlights supply chain cyber exposure
The warning comes amid heightened awareness of cyber risk across UK manufacturing following a major cyber attack on Jaguar Land Rover (JLR), headquartered in Coventry last year, which disrupted production and impacted suppliers across the West Midlands automotive cluster.
JLR was forced to pause manufacturing operations for several weeks following the incident, with disruption affecting key production sites including Solihull and Halewood, as well as engine and stamping operations in the region.
The shutdown, which industry reports suggest cost the company around £5m a day, also placed significant strain on suppliers across its tiered supply chain, with many smaller firms experiencing delayed payments and production stoppages.
Insurers warned that manufacturers often underestimate recovery complexity, particularly where IT/OT environments and supplier networks are tightly coupled.
Cyber, climate, and supply chain risks converging
Climate-related events continue to create wider systemic impacts, affecting transport networks, energy infrastructure, and regional logistics, meaning production can be disrupted even when individual manufacturing sites remain operational.
Tom Hopwood, Head of Customer Relations and Development at Zurich Resilience Solutions, cited a recent example of an aluminium plant hit by a flood which was forced to temporarily suspend operations.
“The OEMs and suppliers were not physically damaged, but they still suffered real business interruption because of shared systems and dependencies,” he said.
Lewis said the most resilient organisations are those that actively map dependencies and challenge assumptions about recovery time.
“The organisations that manage this best understand their dependencies, challenge their assumptions over time, and plan to reduce downtime rather than just respond to it,” he said.
Key priorities identified by insurers include mapping critical production systems, identifying single points of failure across supply chains and digital infrastructure, and testing recovery plans under realistic operational conditions.
