Insurance for manufacturing covers a wide range of potential risks. If you run a manufacturing operation, you will want to have as complete coverage as possible. Most likely, you'll need to address these 6 areas of concern.
Equipment
One of the most basic forms of insurance for manufacturing businesses is equipment. Many manufacturers have systems that do a lot of their work. Especially if the system is expensive or highly customized, replacing it may not be a simple task. Your insurance policy should cover the replacement value of the equipment and at least some of the business you might lose while it's down.
Workers' Compensation
People are critical to manufacturing processes, but they can get hurt on the job. Training and safety systems can only guard so much against risks to workers. You should carry sufficient workers' compensation coverage to address the worst possible injuries someone might suffer at your facilities.
Inventory
Most manufacturers need to store at least some inventory while they ship orders to customers. If you have inventory sitting around, it represents a risk in terms of spoilage, theft, accidents, or other unpredictable events. Insurance for manufacturing should cover whatever portion of your inventory costs would endanger your business.
Similarly, your business likely has inventories of inputs. These also need insurance coverage.
Commercial Vehicles
Plenty of manufacturers also operate commercial vehicles to move inventory around or handle shipments. Your company may also have vehicles for salespeople, company officers, and other folks who need to get out and about. Any accidents involving those vehicles could thrust significant liability for injuries or property damage onto your business.
Professional Liability and Counterparty Risk
Business activities also represent risks, especially if there are professional or contractual obligations attached. A manufacturer that produces materials for other businesses might be on the hook if it can't deliver an order in time. The other party may sue for damages based on business losses.
Also, these risks go the other way when you acquire parts, materials, or services for your operation. There is a risk that a counterparty could go bankrupt and never even pay damages, and it's good to have insurance coverage if that happens.
Product Liability
Finally, there is a risk that something you manufacture could harm someone in the course of its normal use. The best legal notices and disclaimers in the world don't guarantee such a lawsuit won't succeed. As a manufacturer, your products need liability coverage.
