Every business owner does their best to run their business perfectly. You try to avoid mistakes, operate above board, and take care of your customers and employees. But even with the best effort, the unexpected can still happen — this is where business insurance for manufacturers can help.
The right insurance will help your company respond to claims or lawsuits, and can protect your property, equipment, and personnel.
Who Needs a Manufacturer Insurance Policy?
If you’re a business in the manufacturing industry, then manufacturing insurance is necessary for you. Perhaps you’re one of the following:
- Air conditioning equipment manufacturers
- Appliances and accessories manufacturers
- Bakery products manufacturers
- Children’s clothing manufacturers
- Craft breweries
- Eyeglass lens manufacturers
- Fruit drinks, soda, spring or carbonated water manufacturers
- Metal goods manufacturers
- Plastic goods manufacturers
- Sign manufacturers
Whatever end of the manufacturing spectrum you operate in, there’s plenty to insure. To get a better idea of exactly what you need, let’s take a look at different types of insurance for manufacturing companies.
Types of Manufacturing Business Insurance
One of the best ways to make sure you’re covered in all the key areas you need is to start with what’s called a Business Owner’s Policy (BOP). A BOP combines three different policies that are crucial to just about every business owner:
- General liability insurance
- Commercial property insurance
- Business income insurance
We’ll touch on these three types of insurance for manufacturers in more detail below. We’ll also cover a few more that, while not included in a typical BOP, can still prove quite useful in a comprehensive manufacturing insurance plan.
You’ll also want to have workers’ compensation insurance to make sure your employees are taken care of. In fact, most states require it.
Manufacturing Liability Insurance
General liability insurance for a manufacturing company can help protect a company’s income and assets. Everyday risks as simple as visitor injuries can cost you a lot in medical bills if not insured. If you were to be sued over the incident, liability coverage will also help address your legal expenses.
Liability insurance typically covers the following:
- Customer injuries
- Customer property damage
- Product liability
- Advertising injuries
Manufacturing Property Insurance
Every business needs commercial property insurance. Property insurance helps protect your owned or rented building from the following:
- Fire
- Burglary
- Theft
- Wind
- Lightning
It also protects the tools and equipment you use to operate your business.
Intellectual Property Coverage
Industrial espionage sounds serious, and it is (it’s also on the rise). Insuring intellectual property is also serious business, and intellectual property coverage can help with that.
In the manufacturing industry, intellectual property can help you cover litigation costs related to the enforcement or defense of patents, trademarks, or copyrights. It will also help protect you from any potential patent infringement claims brought against your company.
Business Income Insurance
Also referred to as business interruption insurance, this policy covers the losses of business income if you can’t operate due to one of the following perils:
- Fire
- Theft
- Wind
Manufacturers E&O Insurance
Errors and omissions insurance (also known as E&O) is a type of professional liability insurance that covers mistakes or negligent service that results in a third-party financial loss. E&O insurance does not cover bodily injury or property damage (since that is covered under liability and property insurance).
For a manufacturing business, E&O insurance covers damages that result from the following:
- Faulty or incorrect products that your business has manufactured, handled, sold, or distributed
- Errors and omissions caused by material defects. This includes property damage to the product, property damage to the work, and property damage to impaired property.
- Failure or negligence to deliver promised services
Protecting yourself from everyday risks is important and vital for the health and longevity of your company. With the many moving parts of the manufacturing industry, finding a suite of insurance coverage tailor-fit to you is the best way to start looking out for your company’s future.