Manufacturing Insurance Explained
What can be covered in my manufacturing operations?
Manufacturers need specialized insurance products to ensure all aspects of your business are covered. Here are some of the types of insurance that your manufacturing business should consider:
- General Liability for your operations and premise(s) liability.
- Product Liability will cover you if one of your products does not work correctly. It is critical that you have coverage in place prior to starting to manufacture – not when you start to distribute or your product may not be covered.
- Business Personal Property and Building for your inventory/stock, tools, machines and office and warehouse/plant furnishings as well and the building if you own it or are responsible for insuring it as a result of a triple net lease.
- Business Income and Extra expense to protect your income if a covered loss occurs and shuts down your operations.
- Machinery Breakdown with Business Income to cover if one of your machines breaks down and stops or limits production. It will cover to both fix the machine and the loss of income as a result of the disruption in your operations.
- Worker’s Compensation to help with medical expenses and lost wages for your employees if they are injured or become sick while performing their job duties.
- Excess Liability insurance to increase the amount of liability coverage you have.
- Product Recall insurance will help you recoup costs if you have to recall your product.
Other types of insurance to consider are Cyber Liability, Employment Practices Liability, Employee Benefits Liability and Commercial Auto. Our trusted advisors will work with you to help you understand and obtain the insurance you need for your operations.
What we will need to know about your manufacturing operations to get started:
- List of everything you are manufacturing and how and what industry it is used in.
- Gross sales projected for upcoming year.
- How you track your product and if a recall plan is in place.
- If liquid, such as an oil, the company will need the formula. For food, does it require refrigeration? Is it a dry or wet product?
- How long you have been manufacturing the product.
- How is the product being distributed? Via direct retail or through a wholesaler or manufacturers rep.
- Safety protocols and training procedures (may request the manual).
- Number of employees by duty, separated by full and part-time and total payroll for each.
- Details on security for the building, as well as information on the building itself such as year built, updates to plumbing, electrical, HVAC and roofing.
- Schedule of the tools and machines and values for each. Smaller items can be grouped together for a total dollar value.
How is the cost of my insurance determined?
Many things will factor into the cost of your insurance, but major components are gross sales, what the product being manufactured is being used for, are large drivers for the general liability and products liability insurance. For property, the values of each type of property to be covered as well as the amount of business income insurance you will need.