Manufacturers’ insurance protects your business against a wide variety of mishaps. It can protect against things like damage to your property or equipment, injuries or illnesses suffered by customers and employees, and many more situations resulting from your business operations or products. Whether you are manufacturing for the food, aviation, automotive, medical, or furniture industry, your product plays an essential role in people’s lives. Therefore, your manufacturing operation comes with a lot of potential liability.
These are a few questions you should be asking yourself:
- What if my product hurts someone?
- What if my product fails?
- What if you had to have a large-scale product recall?
- What would happen if your facility had to be shut down for several weeks?
These are items that insurance can cover. Here is what you need to know about protecting your business with an insurance policy for your manufacturing business. In this blog, we will be covering the key points to most manufacturing insurance policies.
General Liability Insurance
General liability insurance (GLI) is sometimes called business liability insurance or commercial general liability insurance. This type of liability insurance coverage helps protect your business from claims of bodily injury or property damage that can come up during normal business operations. General liability claims can be as simple as a tree blowing down on an automobile. It is the overreach insurance policy that covers bodily injury and property damage. General liability insurance also covers legal fees as long as the accusation is a covered claim.
Property Liability Insurance
We know how hard you work to run a successful manufacturing business. Your company property is essential to your business. Manufacturers’ insurance gives you peace of mind knowing your property has protection. Products liability insurance is one of the most important coverages that a manufacturing company can have and also has the highest average claim payout of any coverage. With manufacturing products, there are strong possibilities that your product may harm someone. Say you produce a component of another product, that product could potentially be brought into any number of lawsuits, and you could be liable.
Property Insurance
Usually in manufacturing businesses or distribution businesses, the business personal property can transform into many different forms, shapes, and locales. Business personal property which is of the inventory nature can increase in value from raw materials all the way through to the finished product. Having built-in protection for inventory fluxes as they increase from a work in progress standpoint can help prevent gaps in coverage and losses. Your equipment costs a lot of money and if it were to be damaged, your business could be inoperable for a long time. Property insurance helps manufacturers by replacement of damaged equipment. It will also cover your net income and ordinary payroll while your operations are down.
Errors And Omissions Insurance
What if your product causes financial damages that are neither property damage nor bodily injury? If you make a part that goes within a larger system, and your part makes the entire system inoperable, you could be responsible for financial damages that arise out of that product. Claims can tie you up in legal fees –something that can be avoided with the purchase of an E&O insurance policy.
Patent Insurance
Patent insurance is a type of intellectual property insurance coverage. An IP insurance policy can include coverage for patents, copyrights, and other specific types of IP. Even if you already own a Business Owners Policy, you are not protected from lawsuit-related costs. IP infringement policies are typically triggered as a result of a third party alleging that their intellectual property rights are infringed by the product and services being manufactured, sold, or distributed by your business.
Workers Compensation Insurance
Workers’ compensation or workers’ comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence. If you have employees, you must have workers’ compensation insurance.
Product Recall Insurance
Product recall insurance covers expenses associated with recalling a product from the market. Product recall insurance is typically purchased by manufacturers such as food, beverage, toy, and electronics companies to cover costs such as customer notification, shipping costs, and disposal costs.
Ways To Lower Your Product Liability Risk
Not only will lowering your liability risk lower your policy rate, but it will also show insurance companies that you are a good partner for them.
Here are tips to reduce your product liability risks:
- Establish a COVID-19 Task Force.
- Conduct a product liability evaluation.
- Put a product liability prevention program in place.
- Clearly document your countermeasures.
- Understand your product design risks.
- Follow your product safety management plan.
- Review your supply chain and revise contracts.
Manufacturing companies have vastly different risks, and your insurance policy should account for exactly what you are producing. While manufacturing operations vary widely, each needs special consideration. Get a quote online and if it is too expensive, talk to a risk advisor.
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About Gartman Insurance
About Gartman InsuranceWe are your trusted, family-owned independent insurance agency. Your family, your business, and your possessions are all important to you, but you may not know how to best protect them. We have the experience and local knowledge to navigate the unique risks you face, serving as your insurance advisor. Since 1999, Gartman Insurance Agency has proudly served our customers in Kentucky, Ohio, Indiana, Tennesee, and Alabama, helping them to find the right insurance coverage to fit their needs. Our customers are our priority, and we are always finding ways to better serve them, whether that’s helping them find a better policy or giving them the power of choice when it comes to their insurance coverage.
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