Insure Your Investment in Manufacturing: Manufacturing Business Protection

Manufacturing businesses are the backbone of many industries, producing goods that fuel our economy. However, with the complexity and scale of operations comes significant risk. From expensive machinery to high-value inventory, manufacturing businesses are vulnerable to a range of threats. Comprehensive insurance coverage is vital to protect your investment and ensure long-term success.

What is Manufacturing Insurance?

Manufacturing insurance is a tailored form of commercial insurance designed to protect manufacturers against specific risks. This umbrella term often includes a combination of policies that cover buildings, equipment, employees, products, and potential liabilities.

Key Coverages for Manufacturing Businesses

When it comes to insuring a manufacturing business, several coverages are particularly relevant:

1. Property Insurance

Manufacturing property insurance is essential to safeguard your physical assets, including:

• Buildings: Protects the physical structure against risks like fire, vandalism, or natural disasters.
• Contents: Covers equipment, raw materials, and finished goods stored on-site.

2. Business Interruption Insurance

If your operations are halted due to a covered event, such as a fire or natural disaster, business interruption insurance helps cover:

• Lost income
• Ongoing operational costs, such as rent and payroll
• Extra Expenses to get your business operational after a loss

This ensures your business can recover financially while operations are suspended.

3. Equipment Breakdown Insurance

Manufacturing relies heavily on machinery. Equipment breakdown insurance provides coverage for:

• Repairs or replacements of damaged machinery
• Losses stemming from downtime caused by equipment failure

4. Product Liability Insurance

If a manufactured product causes injury or damage, product liability insurance protects against legal claims. This is especially crucial for businesses involved in high-risk industries, such as food production, medical equipment or automotive parts.

5. Workers’ Compensation Insurance

Manufacturing environments can pose safety hazards for employees. Workers’ compensation insurance is mandatory in most jurisdictions and covers:

• Medical expenses for injured workers
• Lost wages during recovery
• Legal costs if an employee sues for negligence

6. Commercial General Liability Insurance

This coverage protects against claims of bodily injury or property damage caused by your operations. For instance, if a client or vendor is injured while visiting your facility, general liability insurance steps in.

7. Inland Marine Insurance

For manufacturers who transport raw materials or finished goods, inland marine insurance covers items while they are in transit or temporarily stored off-site.

8. Commercial Auto Insurance

Manufactures typically provide their executive and sales teams with a company vehicle, which has a unique set of risks associated. There is typically a crossover of personal and business use on these vehicles. Having the right coverage is important to protect the company correctly. Heavy trucks for moving completed products from manufacturing facilities to offsite warehousing space is a normal use case. Any time extra heavy trucks are owned there comes a higher risk, even if the distance traveled is just a few miles between locations.

9. Cyber Liability Insurance

As manufacturing processes become increasingly digitized, the risk of cyberattacks grows. Cyber liability insurance helps protect against:

• Data breaches
• Ransomware attacks
• Financial losses from system downtime

10. Directors and Officers Liability

Coverage to protect the ownership group, key executives, and board members against professional liability lawsuits.

11. 11. Employment Practices Liability Insurance (EPLI)

Coverage to protect the manufacturer against claims brought by employment related practices.  Sexual harassment, age discrimination or wrongful termination (among other perils) are items to consider when purchasing EPLI coverage.

12. Umbrella Liability Coverage

Additional layers of liability that blanket the underlying general liability, products liability, and auto liability to protect the manufacturer for catastrophic liability events. Coverage up to $20,000,000 can be provided.

Common Types of Manufacturing Businesses

Manufacturing spans a wide range of industries, each with unique risks and insurance needs. Common types of manufacturing businesses include:

• Food and Beverage Manufacturers: These businesses face risks related to contamination, spoilage, and product recalls.
• Textile and Apparel Manufacturers: These businesses require coverage for inventory damage and supply chain disruptions.
• Metal Fabrication Shops: Given the reliance on heavy machinery, these businesses benefit greatly from equipment breakdown and workers’ compensation insurance.
• Electronics Manufacturers: Liability coverage is critical, given the high likelihood of product defects or malfunctions.
• Household Goods Manufactures: Everyday items you find in American homes are produced by these companies. These products can consist of storage totes, shelving and chairs. These manufacturers produce high volumes of products and need coverage to protect these everyday product risks.

How Much Insurance Do You Need?

The right amount of coverage depends on several factors:

• Value of Assets: Consider the replacement cost of your building, equipment, and inventory.
• Business Scale: Larger operations often face more substantial risks and require higher coverage limits.
• Risk Tolerance: Businesses with lower risk tolerance may opt for comprehensive policies with minimal deductibles.
• Legal Requirements: Some coverages, such as workers’ compensation, are mandatory in many jurisdictions.

Choosing the Right Insurance Provider

When selecting an insurance provider for your manufacturing business, prioritize the following:

• Industry Expertise: Choose a provider familiar with manufacturing risks.
• Customizable Policies: Look for tailored coverage options that address your specific needs.
• Strong Reputation: Opt for companies with proven reliability in claims handling.
• Competitive Pricing: Obtain multiple quotes to ensure you are getting the best value.

Protect Your Business with Hitchings Insurance

At Hitchings Insurance, we understand the challenges manufacturers face. Our experienced team specializes in crafting insurance solutions that prioritize “People Before Policies.” Whether you are insuring a single location or a large multi-state production operation, we’re here to help you find coverage that fits your needs and budget.