Manufacturing can be risky when your work involves heavy equipment and tools like band saws, drill presses and forges, which require extensive experience to operate safely. And because manufacturing is capital-, hazard- and property-intensive, you have a greater risk exposure than other business types for property damage, injuries, product liability claims, and losing important records and files.
Protect yourself from risk
No matter what you manufacture—metals, plastics, clothing, furniture—you need to protect your property, your employees, and people/property that come into contact with your business or products with tailored manufacturing insurance solutions.
Here are the major risks and coverages to consider:
Property Damage (fire, weather, natural disasters, theft/vandalism)
Commercial property insurance covers your buildings and their contents in the event of fires, theft, vandalism, and certain weather events. Your warehouses and office space, office equipment, industrial machinery and equipment, and materials inventory can all be covered with a commercial property policy. An independent insurance agent can help you evaluate how much coverage you need for your plant, equipment, and inventory. Proper valuation of your business property is essential to making sure that you will be sufficiently reimbursed in the event of a loss.
Lost Income and Business Interruption
A commercial property policy also provides coverage for business interruption, or circumstances where a covered event (fire, tornado, etc.) causes damage that forces you to temporarily close while you make repairs or relocate. Business interruption coverage helps pay for lost income and ongoing expenses (employee salaries, rent, etc.), and may even help pay certain relocation expenses for a specified period after a covered loss. You may even be able to insure your manufacturing business for lost income due to interruptions in utility services, such as electrical and water services. Ask your agent how to add this coverage to your business property policy.
Equipment breakdown coverage (also called boiler and machinery coverage) can supplement your manufacturers property insurance policy. It covers breakdowns due to power surges, motor burnout, boiler malfunction, and even operator error. It provides reimbursement for the costs to repair or replace damaged machinery, as well as related lost income and business interruption costs.
Products That Cause Damage Or Injury To Others
Commercial general liability (CGL) insurance is essential for any manufacturer. It is necessary when your business is negligent and causes bodily injury or property damage to a third party. It covers direct costs related to the incident (property repair costs, medical expenses) as well as attorney fees, court costs, settlements, and court-ordered judgments, up to the limits of your policy.
Product liability insurance covers a manufacturer’s responsibility for losses or injuries to a user, buyer, or bystander caused by a defect or malfunction of their product. This is typically in the form of manufacturing or production flaws, design defects, or defective warnings or instructions.
Commercial umbrella insurance, or excess liability insurance, provides additional liability protection on top of the coverage provided in your CGL policy. When the limits of certain applicable liability policies have been exhausted, your excess liability policy kicks in. This is important coverage in the event that a covered claim exceeds the amount of coverage available from any other applicable policy
Manufacturing firms like yours often store information about employees, contractors and customers, including Social Security and credit/debit card numbers. Cyber coverage helps pay the costs of notifying impacted individuals such as customers and employees, managing public relations, good faith advertising, and more if personally identifiable information is lost or stolen.
Products and Inventory Damaged In Transit
Inland marine insurance covers products on the move and is designed to help protect you from financial losses when cargo of any kind is damaged in transit.
Commercial Vehicle Damage and Injuries
Commercial auto insurance typically covers cars, trucks, trailers, vans and other vehicles designed for use on public roads. Only a business auto policy can help provide protection for vehicles being driven for business purposes.
You can customize your policy to cover:
Vehicles that your business owns
Vehicles that your business owns, leases, or hires
All vehicles that are used for business purposes, including those that the business does not own, lease or hire (e.g., personal vehicles that are driven for business purposes)
You can list each vehicle on your policy and carry different coverage for each depending on the vehicle’s characteristics and the coverage you need for it.
Employee Accidents and Injuries
Workers’ compensation insurance helps protect your employees and your business from the costs of workplace accidents and injuries. Kansas requires workers’ compensation insurance for most employers—see rules here. Those statutes determine the amount of benefits an injured employee is entitled to, what types of injuries are covered, and how medical care will be delivered. In general, workers’ compensation insurance covers the costs of medical care for the injured worker, as well as income replacement if they cannot return to work for a while. Workers’ compensation insurance may also provide death benefits if a worker is killed at your facility.