You’ve probably done some research and found that there is no shortage of insurance products out there; however, do you know which ones are the most important? If you’re in the process of searching for manufacturing insurance, make sure you start with the following coverage lines.
If a product that you’ve made and distributed causes bodily injury or property damage, a products liability policy will respond. Also, your liability is not limited to products that you have designed. If you provide goods with components designed by another company, you could still be dragged into a lawsuit.
General Liability (GL) and Property Insurance
Undoubtedly, you work hard to ensure that your business is safe, but you can’t prevent some accidents from happening. GL and property insurance are staples when it comes to manufacturing insurance. GL insurance works to protect you against third party lawsuits resulting from bodily injury or property damage. Property insurance can cover the business assets such as your buildings and equipment.
The fact of the matter is that workers in the manufacturing industry are at a higher risk of being injured on the job. When an injury happens, a claim can be made against you. Workers’ Compensation is an important coverage to have, as it covers an injured employee’s medical expenses.
There are certainly other coverage types that you’ll want to look into; however, these three are critical. Contact a manufacturing insurance specialist for more information.
A product liability insurance policy protects companies in the even that products they manufacture injure someone or cause property damage. Product liability insurance is particularly important for businesses that deal in product manufacturing and production. It protects a business financially in the case of a lawsuit claiming product defects. Manufacturers are legally responsible for damages that may arise from the use of their products. The manufacturer has the responsibility to ensure that products are of high quality. Most liability claims are covered by a company’s commercial general liability policy (CGL). CGL policies generally cover bodily injury and property damage that occurs off business property that is the result of a product. Unfortunately, CGL policies do not cover damages to a product when the damage was caused by a faulty part or faulty workmanship during manufacture. If the manufacturer of the equipment is also the manufacturer of the faulty part, CGL policies do not cover damages. A product liability insurance policy goes further than a CGL policy and can be purchased independently of CGL.
Having product liability insurance is especially important for partnerships and sole proprietors. Unlike corporations, these business owners do not have a corporate shield to hide behind in the case of a lawsuit. Product liability exposure lasts as long as a product is in use even if the product is no longer in production. Therefore, your product liability insurance policy should be kept in force as long as the possibility remains that a product is in use and could cause injury or damage.
There are many aspects of business when it comes to manufacturing. If you own a factory or other similar company, it’s important to understand the type of manufacturing insurance coverage options you could purchase to benefit your company. The following are just a few possibilities.
One type of coverage that could make or break your business is equipment breakdown coverage. Manufacturers typically do a lot with machines, and if one breaks down a whole line of production could be shut down. Being able to afford a quick fix and a repair or replacement of the machine is essential and possible with proper coverage.
Product recall is another type of manufacturing coverage you could consider. After your products are on the shelf and being purchased by consumers, you could discover some type of defect. Being able to recall the products and not lose out on too much revenue will be made easier with comprehensive coverage.
If your company owns any sort of vehicle, auto insurance can be included in your policy. This could include lifts, vans, delivery trucks and a variety of other automobiles. If they are damaged in any way, the insurance can kick in to cover the costs and keep your fleet on the road.
As the owner of a factory, you might want to look into which type of manufacturing insurance coverage is essential. With so many options, it may be smart to speak with an insurance agent to discover what will be the best for your company.