You’re in the manufacturing business, so you’re no stranger to taking products from the conceptual stage all the way to reality. By the time you’re finished, there’s not a loose screw or a wobbly base to be found. You depend on machine-driven precision, not to mention flawless execution from every staff member on the floor.
But manufacturing means a lot of moving parts—literally. Accidents do happen, no matter how exact your measurements or how experienced your workforce. On your best day, you hit peak output and get to add another tally to your board showing days without incidents. On your worst day, and every one between, you need business insurance for manufacturers behind you.
Here are four key reasons that manufacturing operations need commercial insurance.
A factory fire damages your machinery
U.S. fire departments respond to approximately 37,000 fires at industrial or manufacturing properties every year that cost $1 billion in direct damage. What starts as an errant spark can spread quickly, threatening your building’s structure and everything inside.
Taking out a Business Owners Policy (BOP) with property insurance can mean the difference between shutting your doors forever or getting back up and running after a damaging event. As the U.S. Small Business Administration writes, “the definition of ‘property’ is broad, and includes lost income, business interruption, buildings, computers, company papers and money.”
A buyer alleges a batch of your products doesn’t live up to contract standards
Anytime you provide a product or service to the world, you’re vulnerable to claims of negligence. What if someone sues your manufacturing company, alleging you incorrectly assembled a product in a way that could lead to a user injury? Or perhaps a simple contract dispute boils over and a client threatens to sue due to the misunderstanding.
Without professional liability insurance, commonly called “errors and omissions” coverage, claims of job-related negligence could cost your manufacturing company a staggering amount in court fees and damages, not to mention reputational injury if you can’t afford to defend yourself well.
A worker hurts their hand on the job
You have strict safety standards in place, but humans are only, well, human. Equipment can jam, heavy objects can fall and limbs can be in the wrong place at the wrong time. This is why workers compensation is legally required for companies with employees.
As the Insurance Information Institute points out, the benefits of workers compensation insurance are two-fold: it ensures that injured employees receive compensation for medical care and lost income, and it protects employers from lawsuits over workplace conditions.
An employee causes an accident while driving your commercial truck
Chances are you have at least one commercial truck or van, or possibly even a fleet. A routine trip across town can take a turn for the dramatic if your vehicle is involved in an accident. Requirements vary by state, but having a commercial auto insurance policy is important in case your manufacturing company is responsible for paying vehicle damages or medical bills for those involved.
Are you ready to take a closer look at insurance options for your manufacturing business? CoverHound makes it easy to compare quotes side by side so you can get the best coverage for the scope of your operation. Check out great premium savings today!