4 Ways to Protect Your Manufacturing Business from Potential Hazards
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4 Things to Know Before Insuring Your Manufacturing Business
If you're just getting your manufacturing business up and running, you know that there are a ton of different factors to
Ask your insureon agent about which of the following types of insurance can help protect your business.
General Liability Insurance for Manufacturers
General Liability Insurance protects manufacturers from claims that their operations caused physical injury or property damage to a third party—that is, to someone not directly involved with the business’s operations.
When a third party brings a lawsuit against your manufacturing business claiming that it caused him or her financial loss or personal injury, your General Liability Insurance benefits kick in to cover the cost of defending yourself against the claims and any costs you are found liable to pay, up to the limits of your policy.
This protection is invaluable for many manufacturers, because even frivolous or unfounded lawsuits require you to mount a legal defense to protect yourself. Between the cost of attorney’s fees and court expenses, such a defense can be costly even if you are not ultimately responsible for paying out any damages.
Property Insurance Coverage for Manufacturers
Insuring the materials you need to produce your products is an excellent way to protect yourself from the financial losses that can result from theft or damage of those materials. Property Insurance offers financial coverage to your premises and other business assets.
Investing in adequate Property Insurance can make a significant difference to the overall financial health of your business. With appropriate Property coverage in place, you can avoid costly interruptions in service that would otherwise result from a supply chain interruption and / or a weather event that hurts your stock. When you file a claim on your Property policy, your insurer provides you with the funds necessary to replace or repair any of your covered equipment, up to the policy’s limits.
Workers’ Compensation Insurance for Manufacturers
Workers’ Compensation Insurance covers the costs that arise when one of your employees is made sick or injured during the course of performing his or her work. Today, most states require business owners to carry at least some form of Workers’ Compensation Insurance, though the specifics vary greatly from one jurisdiction to another and from one type of business to another.
It works like this: when an employee gets injured or sick at work and sues your business for the costs associated with medical treatments, your Workers’ Compensation coverage kicks in. In addition to paying any medical costs and other damages for which your business is found liable, your insurance pays for the cost of defending yourself in court.
In addition, your Workers’ Compensation Insurance might pay for any wages your employee is unable to earn during the time he or she is ill or injured. Depending on your state’s laws and the structure of your business, you may be able to exclude yourself from your Workers’ Compensation coverage to save money on your premiums. Before doing that, though, be sure to consult with your insureon agent to determine whether that’s a wise decision for your business.
Another question you may want to ask your manufacturer insurance agent is whether you are required to cover 1099 contractors in addition to full- and part-time W2 employees.
Keep excellent records.
In the event that you have to submit a claim on your Property Insurance, you will be able to receive coverage more quickly when you’re able to provide excellent documentation of your property and what happened to it. This might involve taking pictures, updating inventory files regularly, or otherwise monitoring exactly what you have in stock and what condition your assets are in.
Maintain secondary business channels.
An interruption in the business of one of your main suppliers or customers can lead to a backup in your business’s cash flow. To minimize the impact any such interruptions have, maintain relationships with secondary partners even if you prefer your primaries. This will make securing raw materials and unloading your products easier in the event of a disaster.
insureon provides customized coverage for many types of manufacturing businesses, including…