Understanding Manufacturers Insurance
The manufacturing industry spans far and wide for a variety of products. Manufacturing processes differ depending on the end product and its usage; consequently, the risks and insurance needs vary. For instance, the insurance requirements of a textile mill and a coffee bean roasting company will differ drastically. The textile mill demands the usage of large manufacturing equipment and machines and complex processes while a coffee bean roasting company has large ovens but the process is fairly simple. Another difference is that with textiles, their use is for the outside of a human body while the end coffee product is consumed internally. Which do you think has a higher level of risk? Each manufacturer faces its own set of challenges. It is important to take into account the processes and materials involved as well as the end product before purchasing insurance policies.
Relevance and requirements are the two aspects any manufacturer must focus on before opting for a set of policies. Our experienced insurance agents will be available for any advice or queries.
Apart from several policies that you could add to your Manufacturing Business Insurance, the following are the most important policies you should consider:
- Product Liability Insurance
- Excess Liability Insurance
- Workers’ Compensation Insurance
- Stock Output Policy
- Commercial Property Insurance
- Business Interruption Insurance
- Equipment Breakdown Insurance
Analyzing a situation and following through its repercussions will help you understand the usage and importance of certain policies.
Suppose a cylinder explodes within your manufacturing equipment, it will consequently have several deterring effects that gravely impact your business. Let us study the repercussions.
A Package Policy encompasses general liability (including Product Liability), property insurance, business income& extra expense and by endorsement add a multitude of other lines of coverage. Crime, Inland Marine (Transit), Equipment Breakdown insurance can all be added to a package policy. This policy with the proper coverage included will cover bodily injury, and property damage liability, damage to your property and equipment, lost income, theft from employees, damage to your product during shipment, and many more types of loss. The customizable nature of this policy protects you against the types of claims that are most relevant.
Workers’ Compensation Insurance
Workers’ Compensation is mandated in most states. State laws make the employer liable for injury to employees while on the job. Most employers are unable to fulfill that responsibility on their own so they purchase a worker’s compensation policy. By purchasing this policy, the employer transfers the responsibility to pay lost wages, medical expenses, or death benefits to the insurance company. Since manufacturers may have a higher rate of injury, it is important to secure workers compensation to assure employee wellbeing and comply with state law.
Product Liability Insurance
Product Liability insurance is typically included within the general liability policy. Whether you manufacture automobiles or are a food processor, you may be sued as a result of customer injury or sickness caused by your product. If your customer’s vehicle has a major malfunction causing a serious accident with loss of life involved, your company will be sued. If your food product is contaminated causing illness to many consumers, your company will be sued. Also, your business will have to bear the costs of a product recall. Product Liability Insurance is designed to bear the cost of product recall and defend your business against bodily injury, property damage and wrongful death lawsuits.
Inland Marine Insurance
Inland marine is a general insurance term which encompasses many different specific types of insurance. For instance, Transit Insurance is a type of Inland Marine coverage. This insurance covers your finished product while being shipped from your location to the destination for a specific set of perils. Any manufacturing business can benefit from this policy as all types of product can suffer loss from point A to B. Overseas shipments, often the most economical way to distribute product can easily suffer loss from a ship sinking, a fire onboard or piracy.
Another type of Inland Marine coverage applicable to manufacturers is a Manufacturers Output Policy often called a MOP or more recently a Commercial Output Policy (COP) since it favors more than just manufacturing risks but also industrial and processing sectors. This type of policy combines the above-mentioned transit coverage with property insurance on one policy that is rated using a unique system that often is priced much more competitively than a standard business property policy, providing coverage on your product during the manufacturing or processing phase and while in transit.
No two businesses are the same. The risks your business faces and insurance policies that cover those exposures depend on your processes and products. We present a host of insurance policies that protect your business in different ways. Our agents will brief you about the best-suited policies after reviewing your operational factors such as your product, processes, revenue, payroll, claim history, location, assets, and distribution area. Products distributed outside of the US and its territories need worldwide coverage for suits brought outside the US.
Every and any business that involves creating products from scratch benefits from this insurance policy.
Few examples of the businesses that fall within the sector are as follows:
- Furniture Manufacturers
- Iron, Steel, Aluminum Industries
- Food Processing& Manufacturing
- Personal Care & Toiletry Product Manufacturers
- Apparel Manufacturers
- Plastic & Rubber Manufacturers
- Chemical Product Manufacturers
- Anything that we use is manufactured