Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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manufacturer business insurance

Businesses that produce goods on the premises have specific manufacturer business insurance needs to cover the costs associated with various types of loss. Reputable insurance providers are able to construct proper coverage that will provide the funds necessary to execute the continuity plan following an unanticipated loss. Some business owners attempt to self-insure certain aspects of the following categories, but this practice is not encouraged.

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Business Property Loss

Businesses in every sector of the economy share this insurance category. Unforeseen events such as major storms, hail or fire can render the business location unusable. Excellent insurers provide fast claims service that is handled professionally with a personal touch. When comparing insurance companies, their claim records must be reviewed. Great customer service and claims response is essential to the life and health of any manufacturing business.

Along with the standard building coverage and contents insurance, the following special coverage categories are available for manufacturers:

Business income insurance – While the premises are being restored after loss, the business will receive sufficient funds to retain employees and operate. The length of time varies and should be evaluated based on the location of the business.

Expenses from a product recall – If a product must be recalled from the market, the expenses are covered under this category.

Limitation of thefts – Specialty components and the patterns and dies to create products are covered against theft or damage through this specialty category.

Spoilage loss – Food manufacturers are wise to carry this category of insurance that will cover the loss of perishable goods when equipment breaks down or an extended power outage occurs.

Labels and brands – When inventory is damaged, brands and labels must be removed to salvage and use them on new merchandise. This category of coverage covers the cost of these activities.

Building ordinances – Manufacturing facilities sustain increasing costs to comply with local building codes. The cost of updating all of the buildings in a complex can be overwhelming if a natural disaster requires that they are updated to meet codes. The limits on the building coverage are raised for demolition and debris removal under the building insurance category.

Service charge for fire protection and service – This category is important when the facility would require substantial resources from the local fire department to address a blaze.

Off-premises personal property – Goods that are en route will be covered against fire, theft or damage while in transit or stored in a temporary location that is not owned or leased by the company.

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Business Liability Risk

Sufficient manufacturing business liability insurance coverage is essential because of the many people who could file a lawsuit against the company. Legal fees and the actual cost of the claim are covered within the policy

product recall

limits. One way to increase the coverage level is to carry an umbrella liability policy. Reputable insurers are able to guide the business owner through the decision process about the following coverage categories:

Business operations and premises – Accidents that happen on the business property, that do not involve employees, are the responsibility of the business. Employee injuries are covered under the worker’s compensation policy.

Personal/advertising injury – Anyone can claim that the business made false claims about products and operations. This category will protect the business against the costs of defending the claims.

Printer’s omissions and errors – Publishers and commercial printers carry this type of insurance to mitigate the risk of customer claims that they suffered significant loss of revenue because of errors or omissions made by the printer during their production process.

Medical expenses – The costs associated with an ambulance response and the medical services required following an accident are covered under this category.

Employment practices – Any employment-related offenses are covered when the stated principles are accused of wrongful termination, harassment or discrimination.

Business Crime Risk

Costs associated with crimes committed against the company can make the difference between profit and loss. Robbery and embezzlement are not the most common crimes. Wise business owners pursue coverage for the following categories:

business crime

Dishonest employee activity – If employees are found to have stolen inventory, money or anything else, this coverage will cover the loss.

Securities and paper money – When money is stolen from the employee that is assigned to take the funds to the bank, this insurance coverage will repay the business.

Counterfeit currency – Money orders and paper currency that is counterfeit can be used to purchase goods. After the goods are sent, the loss is shouldered by the business. Insurance under this category will cover the loss.

Forgery/Alteration – If an outside bookkeeper or account writes checks against the business account for their own benefit, this category will repay the business for the lost funds.

Equipment Failure Risk

Mechanical equipment will have periodic breakdowns that will cost a few hours of production, but long periods of non-production are very costly. This type of coverage will pay for extended periods where a major piece of equipment is out of service. Manufacturing businesses that do not carry this type of coverage can suffer significant financial losses.

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Completed Products and Operations Risk

This special category of liability insurance has proven to be essential for manufacturing businesses. A customer can make claims that they sustained an injury or illness because of a product provided by the company. Legal fees and settlements can put an end to the life of a business. Certain types of manufacturing firms would be wise to cover this category of liability insurance.

Final Consideration

Certain insurance companies specialize in providing manufacturer business insurance coverage. Every possible discount should be leveraged to create an insurance portfolio that mitigates risks without over-insuring the business. Some business owners choose to take their chances in the marketplace and carry very little insurance, but the livelihoods of every employee rest on the wisdom of the decision makers.