Everything to Know About Manufacturers Insurance

Manufacturing companies can face all kinds of unique disasters. Some examples include:

  • Equipment causing injury to employees
  • Products causing injury to customers
  • Product recalls due to major product faults
  • Downtime because of unexpected machinery failure

There are many protective measures that can be put in place to minimize these events, such as supplying adequate PPE, running quality checks on products and routinely maintaining machinery. However, sometimes disasters can still occur despite one’s best efforts to prevent them.

Manufacturers insurance can help you cover expenses when negative situations occur. The claims funds received from the insurance carriers could help you recover by settling lawsuits, manufacture new products, or replace damaged machinery. It prevents you from having to reach into your own pocket to pay for these disasters – reducing the need for taking out expensive emergency debts.

What Does Manufacturers Insurance Include?

Manufacturers insurance is essentially a bundle of multiple insurance policies with the needs of manufacturers in mind. Taking out manufacturers insurance can reduce the need to take out multiple individual policies. It’s also more specialized than a general business insurance bundle.

Some of the policies typically included within Manufacturers Insurance include:

Commercial Property Insurance & Systems Breakdown Coverage

This policy can help cover any damage to your factory because of a fire, natural disaster, or vandalism. It can also cover your tools and machinery against such damage, as well as also covering them against theft. Systems Breakdown Coverage pays to replace or repair machinery due to a sudden and accidental breakdown. Such coverage could save you thousands of dollars in the event of a disaster.

General Liability Insurance

General liability insurance covers an array of situations. If your product, tools or services cause injury to a third party (such as a customer, supplier or general member of the public), this policy can offer compensation. It also covers you for any accidental damage to third-party property that your product or services may cause.

Another helpful aspect of general liability insurance is that it can protect you from reputational damage, including claims of slander and libel.

Business Income Insurance

If you are unable to operate your manufacturing company because of a disaster such as a fire, natural disaster, or burglary, business income insurance can help to cover any lost net income. This could be useful in keeping your company afloat, allowing you to continue paying employees and suppliers even though your factory may have been forced to temporarily close.

What Other Policies Can Be Added?

Manufacturers insurance is typically very personalized. You can add all kinds of other relevant policies if you feel they are needed. Some that are commonly added to manufacturers insurance include:

Manufacturers Errors & Omission Insurance

Coverage designed to protect you if your product causes economic harm to a third party (customer) due to negligence in the design or manufacturing of your product. The policy will pay out if you are legally liable for causing the other party a financial loss.

Data Breach Coverage

Cyberattacks against manufacturing companies are on the rise. Data breach coverage could help to cover you against any damage caused by a data breach, such as lawsuits from affected customers and employees. Many manufacturing companies that possess sensitive data, such as social security numbers and credit card information, can benefit from taking out this policy.

Workers’ Compensation Insurance

If you are a company in New Jersey that hires employees, it is mandatory that you take out workers’ compensation insurance. You’ll be glad it’s required if an employee is injured or made sick at your facility. It can help to cover medical expenses and any wages because of absence.

Employment Practices Liability Insurance

This insurance policy can help to cover you against other employee-related lawsuits. This could include claims of discrimination, harassment or wrongful termination. Regardless of whether or not you are guilty of such claims, EPLI can help you pay out the necessary compensation. If you have a large team of employees, this is policy worth having in place.

Is Manufacturers Insurance Mandatory?

Manufacturers insurance is not mandatory, however, it is highly recommended for manufacturing companies. By not having comprehensive coverage in place, you could be leaving yourself exposed to expensive lawsuits and recovery costs in the future, which you’ll have no choice but to pay out of your own pocket.

This insurance policy is designed to protect manufacturers from the most common risks faced in this industry. By bundling multiple policies into one package, it makes it easier to keep track of your coverage and payments. In many cases, such bundles also save companies money as opposed to taking out policies individually.

Should I Get Manufacturers Insurance?

It could be worth taking out manufacturers insurance if you are a manufacturer that currently has limited coverage. It could also be worth looking into if you’re currently paying lots of separate insurance policies and would like to consolidate these into one plan so that you can easily keep track of your coverage.

Manufacturers insurance policies can be fully personalized to meet your company’s specific needs. If you’re looking for comprehensive and bespoke coverage for your manufacturing company, get in touch with one of our agents today for a quote.