3 Insurance Challenges for the Modern Manufacturing Business

With broader customer bases, quicker turnaround times, and more client demands, modern manufacturing customers face business risks and legal liabilities that those in the past mostly avoided. If you are shopping for manufacturers insurance, you might recognize the many challenges of effectively protecting your business in today’s ever-changing marketplace. Here are three of them.

1. Understanding Risk

As markets change and technologies develop, it can be difficult for even the most diligent manufacturers to stay on top of risk management. While you might be good at identifying hazards to your business line, you likely don’t have the expertise to independently recognize all potential legal liabilities. Fortunately, you don’t have to be an insurance expert to get the protection your firm needs. Instead, you can rely on a skilled agency to completely assess your business needs. By collaborating with a knowledgeable provider, you can get only the coverage you need.

2. Combining Coverage

All businesses must have property and general liability coverage. Diligent manufacturers consider combining the following types of coverage for comprehensive protection:

  • Equipment Breakdown
  • Business Interruption
  • Pollution Liability
  • Products Liability

3. Purchasing Peace of Mind

Finally, to get some peace of mind, many manufacturing business owners opt to purchase Manufacturer’s Sales Price coverage. With this level of manufacturers insurance, coverage protects goods at the value of their sales price. Thus, instead of receiving loss reimbursement at raw prices, manufacturers get remuneration for the value of the goods.


Product Defects and El Monte Manufacturers Insurance

Manufacturing plants are open to a variety of risks and exposures depending on the types of products being produced and sold, and those risks can vary. If for whatever reason an item that you produce in some way causes an injury due to a defect or, for example, poorly worded instructions about proper use of the product, this can have costly consequences. In order to minimize any liability exposure, or to defend your claims of product safety, it’s going to require El Monte Manufacturers insurance to protect you against any litigation in the event someone is injured while using your product.

Having prior, similar issues may be problematic

The basic principles of safe product design are to weed out any defects in design to eliminate hazards so that the US Consumer Product Safety Commission deems the product safe. If a hazard issue cannot be removed or fixed, then safety devices must be built in to prevent injuries from occurring. In any case, provide warnings wherever and whenever necessary.

In most product liability cases the defendant will try to assert that there’s no evidence of prior accidents. This will require the defendant to establish that, if there had been prior accidents, the defendant would have known about them due to the fact that there was a mechanism in place to check on the safety of the product.

Having no evidence of any prior accidents may simply be a result of there being no record keeping system in place to record such complaints or no knowledge of any actual incidents that took place. Therefore, evidence must be established before proof of a lack of prior accidents would be admissible. In order to lay the proper foundation for a defense of no prior accidents the defendant would be required to show that he or she likely would have known of those prior accidents if they had occurred.

Product Liability Insurance is a must have solution

Defective products are an unfortunate part of the negative aspect of the manufacturing industry. In El Monte it is prudent for companies operating in these types of operations to carry El Monte Manufacturers insurance, which includes product liability coverage. This can help to ensure that, if a lawsuit is the result of a claim of an injury due to the use of a defective product, that the company will have provisions as a result of having proper coverage in place.

Managing Risk and Factory Insurance

The manufacturing industry provides goods and services for numerous companies and consumers that purchase those products. These businesses are responsible for the continued growth of our great nation. The manufacturing industry is also essential to our country’s success as it provides job opportunities for millions of Americans while contributing to the nation’s standing as an economic world power.

If you own or operate a factory or manufacturing plant, you have risks and exposures that could result in huge financial losses. You owe it to yourself and your clients and workers to carry sufficient amounts of factory insurance to mitigate any issues that may arise from day-to-day operations. Properly managing risks is essential to your existence as well as your growth.

You need to take the time to review your exposures to determine whether your current insurance coverage addresses them effectively enough. You’re likely going to need to invest in several policies in order to close any existing insurance gaps while realigning your current coverage, as this can wind up lowering your overall insurance costs.


Certain exposures can result in great financial loss

Along with your employees, your equipment is perhaps your greatest asset. A breakdown in your equipment will have the potential to cripple your business and you need to be able to minimize your losses. You should be prepared for situations that could potentially knock your operations off line and know exactly what it will take to get your operation back up and running should you be forced to shut down and rebuild after a loss.

Also, ask your agent to take a good hard look at your liability exposures to assess how much you can afford to risk in the event of a significant loss. The agency you choose to partner with should not only be experienced in your industry, but responsive and efficient. Those working exclusively with manufacturers will better understand your concerns and be able to address certain issues related to your field of work, thus allowing them to negotiate on your behalf for the right factory insurance at the best cost.

It would be easier if all you had to be concerned with was manufacturing products, but there’s also risk management strategies, loss control solutions, employee health benefits and HR services, all of which are required to safeguard your assets, drive down expenses, attract and retain employees and improve your company’s bottom line.

Manufacturers Insurance Coverage Options

Because the manufacturing industry is such an essential part of this country’s success, both internally and abroad, this industry needs to be suitably protected against the various risks and exposures that many companies may be faced with.

If your company produces metal goods, or products made from plastic and rubber, this comprises a large percentage of the goods distributed to companies and consumers across the globe. Therefore it only makes sense to protect your business with manufacturers insurance as part of your broad property insurance coverage.

Speak to an insurance agent who understands the needs of this industry and can help to provide you with coverage for the building, business personal property, property belonging to your customers, business income and other key coverages, all of which are designed to protect your assets.

What services and insurance products do manufacturers need?

Start with a comprehensive general liability (CGL) insurance policy that contains multiple coverage parts. Coverage for product liability is provided with most CGL policies that generally also includes separate Products Liability and Completed Operations coverage.

As a purchaser of insurance you should be concerned about the maximum dollar amount that will be paid for each operations or products liability claim and the maximum dollar amount that will be paid out under the policy (annual aggregate). It helps to have a thorough understanding of what your products liability exposure is in order to decide what type of coverage you may actually need.

Since you have employees, workers compensation coverage will be required because this policy exists primarily to assist workers with work related injury payments and also as a way to eliminate litigation against you, the business owner.

Another major concern for most manufacturers is auto insurance coverage, since it will protect your firm from any kind of auto related liability, which is great for companies that use employees to deliver goods to other businesses and warehouses. To save on premium costs you may want to consider self-insuring the physical damage exposure to any older vehicles in use.

Finally, umbrella or excess liability protection adds additional limits for large, third party claims. It’s quite easy to underestimate your exposure to larger losses, and most businesses cannot afford to go without coverage in the event they are faced with an enormous settlement to pay.

Other coverages may be needed and should be available through most carriers. Speak to a reputable agent today.