Manufacturing encompasses a broad range of businesses that vary in size, organization, and especially in what they make and who they make it for. Regardless of the end product, a manufacturer of any size needs to protect its assets from the costs of fires, employee injuries, lost inventory, auto accidents, equipment breakdowns, and lawsuits that can be related to any of these events, and more.
You need manufacturing insurance to help mitigate your risks. Manufactures insurance covers you with a combination of insurance policies that are most suitable for your business.
No matter what you manufacture—metals, plastics, clothing, furniture—you need a comprehensive manufactures insurance program to protect your business from risks. Your manufacturing facility probably contains various materials used to manufacture your products. Perhaps you have flammables such as fabrics, plastics, or wood on hand. You may use paints, lacquers, or other toxic chemicals.
All of these materials, in addition to your buildings, equipment, and other inventory, can be damaged by fire, theft, vandalism, and weather or other natural disasters. No matter what type of unforeseen event occurs, you need manufacturers property insurance to protect your business.
Commercial property insurance covers your buildings and their contents in the event of fires, theft, vandalism, and certain weather events. Your warehouses and office space, office equipment, industrial machinery and equipment, and materials inventory can all be covered with a commercial property policy. An independent insurance agent can help you evaluate how much coverage you need for your plant, equipment, and inventory. Proper valuation of your business property is essential to making sure that you will be sufficiently reimbursed in the event of a loss.
A commercial property policy also provides coverage for business interruption, or circumstances where a covered event (fire, tornado, etc.) causes damage that forces you to temporarily close while you make repairs or relocate. Business interruption coverage pays for lost income and ongoing expenses (employee salaries, rent, etc.), and may even pay certain relocation expenses for a specified period after a covered loss. You may even be able to insure your manufacturing business for lost income due to interruptions in utility services, such as electrical and water services. Ask your agent how to add this coverage to your business property policy.
If your equipment broke down, would you be able to operate, pay for expenses, and earn revenue? Some manufacturing equipment is so specialized that it may take months to replace. What would happen to your business while you waited?
Equipment breakdown coverage (also called boiler and machinery coverage) can supplement your manufacturers property insurance policy. It covers breakdowns due to power surges, motor burnout, boiler malfunction, and even operator error. It provides reimbursement for the costs to repair or replace damaged machinery, as well as related lost income and business interruption costs.