Insurance for Manufacturers
For small manufacturing businesses a business owners policy (BOP) is likely the most cost effective way of providing coverage for your business. A BOP is package of insurance coverages with a single premium. Insurance companies generally have different packages to cater to the insurance needs of the types of small manufacturers. A typical business owners policy will include property and liability insurance with the option to add additional coverage as needed.
Property coverage provides protection for any business property your company owns. This includes real estate, equipment, machinery, raw materials and inventory. If your company rents its production space in the event of a loss, any improvements made by the tenant to the rented space will be covered. Your insurer may require periodic updates on your business’s inventory of raw materials and goods so in the event of a loss the claim can be settled accurately.
Additional coverages for business interruption and extra expense insurance may be included or added to the policy. Business interruption insurance will provide compensation for lost income in the event a loss resulting in a delay of business. Extra expense coverage fulfills similar purpose. In the event of a loss extra expense insurance will pay for expenses incurred from the loss, such as rent for temporary business accommodations.
Liability risk is inherent to every business. A business owners policy provides a liability package with a broad range of coverage. The most important coverage for manufacturers is Products-Completed Operations Coverage. In the event of a lawsuit claiming that a product manufactured by your business caused injury or damages this coverage will provide for the legal defense and damages.
For many businesses a personal auto policy may be sufficient to cover their vehicle use. However, if a vehicle is primarily being used by the business or is owned by the business a personal auto policy will not cover the vehicle and a commercial policy should be purchased. Should you choose to forgo commercial auto coverage your company may be liable if you get in an accident while using a personal vehicle for business. If your personal coverage limits are not high enough to pay all the damages from an accident a lawsuit may be filed against your business. Before making the decision to rely on personal auto coverage you should discuss your current coverage limits with your insurance agent.
Manufacturing jobs can be very physically and mentally demanding and workers are exposed to a variety of workplace risks. When considering the safety of employees prevention is always the best option. In the event that there is a workplace accident it is important to be prepared with the correct insurance coverage. Workers compensation insurance will provide compensation for wages and medical expenses of employees who are injured or become ill on the job. Most states require a company to hold a workers compensation policy for their employees. If you are unsure of your state’s requirements for worker’s compensation coverage check with your insurance agent.