8 Potential Risks Covered by Manufacturer Insurance
Manufacturers come in all shapes, sizes, and product lines. But no matter what type of manufacturing business you’re in, there’s one thing in common: the need to protect your business. We can help you design the right manufacturer insurance policy. Here are 8 potential risks covered by manufacturer insurance:
1. Commercial Property Insurance
Risk Factor
When a gas tank explosion causes an uncontrollable fire, your commercial property and everything within it can suffer a significant loss. This can have a detrimental effect on your manufacturing business.
Solution
Commercial property insurance can help protect the property your business owns or leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease your workspace, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets.
2. Product Recall Insurance
Risk Factor
When a product you manufacture is found to be defective and causes bodily injury or property damage to others, you may be held financially liable. Product recalls can be involuntary (required by a regulatory agency or the government) or voluntary (the manufacturer notices a defect that is unlikely to force an involuntary recall), and can be costly.
Solution
Product recall insurance covers expenses associated with recalling a product from the market. Coverage can include customer notification costs, shipping costs, and disposal costs. Coverage generally applies to the manufacturing business itself, though additional coverage can be purchased to cover the costs of third parties.
3. Commerical Umbrella / Excess Liability
Risk Factor
Losses and lawsuits are quite common in the manufacturing business, and settlements can be substantial. If your business is found to be responsible for damage or injury, you could be facing a large liability loss that exceeds the basic limits of your standard policy.
Solution
You should consider purchasing a commercial umbrella insurance policy which provides higher limits, typically between $2,000,000 and $10,000,000, and often broadened coverages. Coverage is extended over various policies, including general liability insurance, business auto, and directors and officers liability insurance.
4. Motor Truck and Ocean Cargo Insurance
Risk Factor
As a manufacturer, you’re constantly shipping your cargo around the world either by land, air, or sea, which exposes your business to risk as a result of product loss, theft, or damage.
Solution
You can purchase ocean marine insurance for your products while your shipments of goods are in transit, whether it’s by truck, rail, air, ship, or boat, and until they reach their final destination.
5. Business Auto Insurance
Risk Factor
As a manufacturing business, you have many exposures associated with your business vehicles – owned or leased. With a fleet of cars, trucks, vans, or other types of vehicles used in the course of business, a single accident can potentially put your business in financial jeopardy.
Solution
Business auto insurance provides coverage for vehicles owned or leased by your manufacturing business and provides coverage for bodily injury, property damage, and other exposures, and could also include comprehensive and collision coverage as well.
6. Business Interruption Insurance
Risk Factor
What would you do if a fire impacted the operation of your production line and prevented you from serving clients for a day or more? Or what if a pipe leak caused a system outage or extended downtime, leaving your production line inoperable? These and other events can destroy your ability to serve clients and bring in revenue, which can have a major long-term impact on the viability of your business.
Solution
Business interruption insurance compensates you for lost income if your manufacturing facility cannot operate as normal due to damage that is covered under your commercial property insurance policy, such as fire or water damage. Business interruption insurance covers the revenue you would have earned, based on you financial records, had the incident not occurred. The policy also covers operating expenses, like electricity, that continue even though business activities have come to a temporary halt.
7. Commercial General Liability Insurance
Risk Factor
The manufacturing business is unique and comes with many exposures, which can lead to a potential lawsuit. What if a fire breaks out and damages the building and halts production, causing you to default on your delivery contracts? Would your business survive?
Solution
Commercial general liability insurance is an absolute necessity for a manufacturing business. This type of protection provides broad coverage for premises, operations, completed operations and advertising, and personal injury. It will also pay to defend any covered lawsuit or action regardless of its merit. Coverage can be purchased as a separate policy and can be tailored to your specific needs.
8. Workers’ Compensation
Risk Factor
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Solution
Workers’ compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.
Get Coverage Today!
The Satanoff Agency, located in Wayne, PA, is an independent insurance agency based in 41 states across the United States, working to supply our customers with quality assistance and insurance. Our independent agents offer their services to help you as the customer get the unique coverage you need.
To request a quote for manufacturer insurance, click here and we will have one of our agents contact you.
Forge3, http://www.forge3.com/.
