Insuring Your Small Manufacturing Business

As a manufacturer, your business faces unique risks, and you may need specific coverages to protect your business activities fully. Regardless of what you produce, insurance plans for manufacturers all start with similar basic coverage -- a Business Owners Package (BOP) policy. A BOP can provide basic coverage for your Building, Business Personal Property, Business Interruption, Liability, and more all in one package. You'll pay one premium for multiple coverages.

From there, you can identify specific risks unique to your manufacturing business and work with an agent to add any necessary endorsements that can strengthen your protection. Many insurers have created specialty packages that provide tailored protections for small manufacturers.

Below we identify coverages that will likely be included with a Business Owners Package policy.

Property Coverage

Any real estate you own.
Recovery of costs for alterations made by tenants, such as fixtures, installations, additions, that can't be removed from your building.
Any equipment, machinery, raw materials, or inventory belonging to your business. (You'll be required to provide periodic reports on the value of these items so you can be properly reimbursed if you need to make a claim).
Lost income and expenses associated with computer breakdowns or malfunction (Computer Operations Interruption Coverage).
The cost of replacing or restoring lost electronic data, including viruses, hacks, or malware (Electronic Data Loss Coverage).
Ongoing expenses that occur while your business is unable to operate after a loss. It may also compensate for lost profits (Business Interruption Insurance).
Extra expenses incurred due to a loss, such as rent at a temporary location. (Extra Expense Coverage)

Additional endorsements can be added for specific risks that your business may face, such as theft, employee sabotage, equipment breakdowns, and more. Other computer and electronic data endorsements are also available. Connect with your agent to discuss what type of protection you need.

Liability Insurance

Every business and business owner takes risk – and you need protection from a variety of liability coverages. Liability claims can range from accidents that occur on your property to defamation lawsuits. As a manufacturer, you will primarily need Products-Completed Operations Coverage, which will protect you from legal expenses and any damages awarded in the event of a lawsuit claiming someone was injured by a product you manufactured.

Additional endorsements can be added, so talk with an agent about your specific risks.

Business Vehicle Insurance

If your company owns vehicles used in the regular course of doing business, you likely need Business Auto Policy (BAP) coverage. This is true even if you lease or rent vehicles or if your employees use their vehicles for business.

A personal auto policy is unlikely to provide coverage for any vehicle used primarily for business, and it likely won't provide enough coverage to protect your company in the event of a lawsuit.

Workers Compensation Insurance

Workers' compensation rules vary by state, so check with the state(s) that you operate in to make sure you are meeting all requirements.

If you'd like to learn more about insurance for your manufacturing business, give Sea Mountain Insurance a call or contact us for more information. We're happy to answer your questions.