Manufacturing Insurance for Small Businesses

The manufacturing industry is massive and spans numerous sectors. Today's manufacturers are implementing new technologies every day. The manufacturing process is also expansive and plant owners face a variety of risk exposures. Staff can get injured on the job, a customer may get injured or fall ill, or one of your delivery drivers could get in an accident. Each operation comes with various risks—which is why you need a business insurance policy tailored to manufacturers. In this article, we cover some of the insurance solutions available to the manufacturing industry.

Who Needs Manufacturing Insurance? 

This is not an exhaustive list, but simply a few examples of the industries that need that coverage:

• Bottling Plants
• Canning Facilities
• Clothing & Apparel Manufacturers
• Leather goods manufacturing
• Computer & Electronics Manufacturers
• Breweries, wineries, and distilleries
• Food and Beverage manufacturers
• Furniture Manufacturers
• Meat Processing and Packing Plants
• Mobile Home Manufacturers
• Plastics, Resins, and Rubber Manufacturing
• Fabric & Textile Mills
• Tobacco manufacturing
• Tool & Die Manufacturers
• Box and Container Manufacturing
• Petrochemical, Industrial Gas, and Chemical Manufacturing
• Pharmaceutical, Medicinal, and Botanical Manufacturing
• Iron, Steel, Aluminum, and Other Metal Foundries
• Parts and Tools Manufacturing
• Vehicle and Boat Manufacturing
• Any manufacturing business

Insurance for Manufacturers

Insurance policies for manufacturing businesses should consist of a variety of coverages, including but not limited to: 

Business Owners’ Policy

A business owners’ policy (BOP) is a specialized package usually available to small and medium-sized businesses at a discounted rate. Instead of purchasing the coverage separately, bundling the policies can help manufacturing operations save money. Most business owners policies include general liability, property insurance, and business interruption coverage.

• General Liability Insurance: General liability insurance is your #1 risk management solution. It protects any customers you may have inside your plant from common risks such as slipping and falling. If they were to get hurt, this insurance policy can cover their medical costs and any physical damage to their personal property. If they sue you for negligence, this insurance coverage will also cover legal expenses and settlements. 
• Commercial Property Insurance: If your small business is damaged in a fire, natural disaster, or by theft or vandalism, property insurance steps in to repair the damaged building and replace damaged contents. If you have expensive equipment that would be costly to repair if you experience equipment breakdowns, equipment breakdown coveragecan be added as an endorsement. It helps promote business continuity.
• Business Income Insurance: Also commonly referred to as business interruption insurance, this coverage can help cover your operating expenses, lost profits, payroll, etc. while you are unable to operate your business in its normal location. 
• Cyber Liability Insurance: If you store customer information online (such as company name, address, payment information, etc.) then your business is at risk of a cyber-attack or data breaches. If you are the subject of a breach, cyber liability steps in to help cover credit monitoring for clients and can even pay the ransom if necessary.

Manufacturer's Insurance Protects You in the Case of a Product Recall

No matter what type of product(s) you produce in your plant, you need product liability insurance. Product liability insurance will protect your business from claims related to the manufacture, sale, or use of products that may cause personal injury or property damage.

If there’s a problem in production and your product is faulty and causes damage or illness to third parties, you could be held liable. If you’re sued for liability, this insurance is designed to cover court costs and settlements. Any manufacturer needs this liability coverage to reduce risk.

Product recall and replacement coverage can step in to help cover all associated costs to recall products that were determined to be faulty or causes illness to a customer.

Protect Your Employees With These Insurance Options

There are a few insurance options we suggest to provide your team members with a safer work environment.

• Workers Compensation Insurance: Workers’ compensation insurance is legally required in almost every state. Workers' compensation protects your employees if they get injured on the job. It can help cover a portion of their lost wages as well as medical expenses. Work-related injuries can be costly in the manufacturing industry and one claim can easily drain company resources.
• Employment Practices Liability Insurance: Also referred to as EPLI, this insurance protects managers, owners, etc. if they are accused of—but not guilty of—discrimination, sexual harassment, wrongful termination, etc. It will also cover claims if one employee harasses another. 
• Commercial Auto Insurance: If you have employees who use company vehicles (such as box trucks) to deliver product(s) you need to obtain commercial auto insurance. Personal auto insurance will not provide coverage if a personal auto is being used in the course of business.

Some insurance companies offer loss control services to help you identify workplace hazards so you can implement risk management programs to offer protection for your team.

There are numerous other insurance policies available that may fit the specific risks your business faces. We recommend speaking with an agent to help determine your specific coverage needs.

How Much Does Manufacturing Insurance Cost? 

Business insurance for manufacturing companies varies depending on a variety of factors:

• The type of equipment and machinery used in your business operations
• The services you offer customers
• The risk profile of the work environment
• The number of employees you hire
• Whether or not you provide company vehicles
• Deductibles and policy limits you choose
• The type of coverages you choose

The cost varies from other manufacturers and from insurance company to insurance company. An agent will likely request further information to help determine the right insurance package for your manufacturing business.

Get a Free Manufacturers Insurance Quote

At Tivly, we strive to help our customers get the right coverage with the right insurance company. We want to help you save money while helping you protect your manufacturing business. We can help you find an agent, get a free quote, or simply access more resources. Complete the form at the top of the page or can give us a call to learn more at 877-907-5267.

Reviewed By: Sarah Reid, Licensed Agent

Related Articles: Product Liability Insurance, Product Recall Insurance, Equipment Breakdown Coverage