3 highlights from FM webinar on tariffs

Tariffs are changing the way many global businesses operate. The potential impacts are wide-ranging, from shifts in supply chain logistics to increases in building replacement costs.

On Oct. 15, FM hosted an expert webinar to explore those impacts. The conversation featured Michael Paolillo, vice president of FM Cargo; Jason Adams, vice president, operations underwriting and reinsurance; and Eric Jones, vice president, Business Risk Consulting. The three FM experts provided a comprehensive view of the potential impacts of tariffs, as well as strategies to navigate the change with clarity.

An informal survey of webinar attendees underscored the importance of this topic right now: 44% said tariffs were already significantly impacting their business, while only 6% said they didn’t expect tariffs to impact their business.

To watch the full presentation, click here.

How tariffs will impact your cargo logistics

The impact of tariffs may show up in your supply chain and cargo logistics before it shows up anywhere else. Michael Paolillo, vice president of FM Cargo, said many clients are making changes to supply chains and operations—leaning into a “China + 1” strategy of diversification and relying more on places like India, Indonesia and Mexico.

FM Cargo is working with clients as they confront the effects of those changes, such as differences in lead time and new sea or atmospheric conditions, which require changes to how goods are packaged.

“One of the main things that people are trying to do is remain agile to build more resilience into their supply chains,” Paolillo said.

How FM can help: FM Cargo’s risk engineers strengthen your global operations with detailed assessments, tailored solutions and expert loss prevention strategies.

How tariffs could affect property risk exposure

To be sure, the impact of tariffs doesn’t stop at the water’s edge. Businesses that are changing their operations in response to tariffs must also navigate the additional property risks that those changes may bring, explained Jason Adams, vice president, operations underwriting and reinsurance at FM. Moving from central China to the outskirts of Tokyo, for example, could bring different earthquake and typhoon risks. Moving operations to a building that doesn’t have adequate sprinklers also drives different exposures.

“As an underwriter, that changes how I view the risk,” Adams said. “Location really does matter, and location has the ability to change under this tariff regime.”

How FM can help: FM’s engineers help you understand and address your potential exposure to loss—from the ground up. Services like Plan Review keep your growth on track by identifying and mitigating construction risks before projects begin, ensuring facilities are safer, more reliable and more resilient as you expand.

The bottom line for your bottom line

When it comes to the impact of tariffs—especially the potential impact on your bottom line—the only thing that seems certain right now is uncertainty. That’s why it’s so important for risk managers to understand two major things, Eric Jones from FM’s Business Risk Consulting group said: the impact on margins, and the impact on operations.

For example, some businesses have insurance policies that cover named supplier locations.

“If that picture is changing and you’ve got a much greater dependency on another supplier, but that hasn’t flowed through to the risk management process and the risk transfer decision, you may not have the risk transfer or insurance coverage you think you have,” Jones said.

How FM can help: FM’s Business Risk Consulting group works with clients to understand the financial impact of business disruptions.

Watch FM’s tariff webinar here