Insurance for Manufacturing Firms

Business Insurance for Manufacturers and Manufacturing

Insurance for Manufacturers faces many unique risk challenges that require a diligent approach to business insurance. The process of shopping for insurance or looking for alternate renewal options can be overwhelming. In this video, I describe 5 things you should be doing and thinking about before getting quotes on your manufacturing insurance.

What type of manufacturing companies do we focus on?

  • Food & Beverage
  • Textiles & Clothing
  • Fabricated Metal
  • Plastic Goods
  • Electrical Equipment & Components
  • Automotive Components & Accessories
  • Industrial Machinery
  • Medical Devices
  • Furniture & Wood Products
  • Technology Hardware Products

And many other categories, including Importers of goods from China and other foreign countries, often classified as manufacturers.

What insurance should manufacturers have?

Insurance policies for manufacturers will vary between small companies under $15 million in revenue and those above $15 million in revenue. 

Smaller firms can secure most of their core property and liability coverages on a BOP or Business Owners Policy which can efficiently combine your property and general liability, including product liability, crime, and other coverages.

Larger firms typically will be insured on a Package policy where separate coverage forms are bundled together into one or more policies.

The big difference between the two is that BOP will have a lot of policy enhancements already built into the policy, and a Package policy needs to be customized to achieve that level of broad protection.

Beyond the typical property, general liability, workers’ compensation, and core coverages, here are some unique coverage forms that need to be carefully designed to meet a manufacturer’s needs:

  • Machinery & Equipment Breakdown 
  • Product Recall Insurance
  • Manufacturer’s Errors & Omissions Insurance
  • Cyber Insurance
  • Environmental Liability Insurance
  • Management Liability, including Employment Practice Liability Insurance
  • High Limit Excess Insurance
  • Trade Credit Insurance

What is Manufacturer’s Insurance? – Everything you need to know 

In this video, I take a deep dive into what the right insurance program looks like for a manufacturer, how to get the best results in the market, and what an ongoing service plan should look like. This is a longer video, but it does timestamp sections in the description box if you’re looking for something specific.

What does Insurance for a Manufacturer Cost?

The cost of the various policies mentioned above for a manufacturer will vary from company to company. Unfortunately, there’s no way to ballpark an estimate because of the various rating factors and different elements in pricing an account.
But you will see figures priced on some insurance websites that say things like the average cost of manufacturing insurance is $1,000 a year or $57 a month. These figures are ridiculous and have no meaning. In this video, I talk about what goes into premium development and how you can reduce insurance costs. I then go into the steps you can take to get the best results for your manufacturing business insurance.

What drives up the cost of insurance for a manufacturer?

Two major factors impact the cost of business insurance for a manufacturer.
A Manufacturer’s Claim History
A Manufacturer’s Risk Control Program
If your claim history is higher than average, you’ll pay higher than average rates. Lower-than-average claim experience will result in lower-than-average premiums.
The counterbalance to claims is a manufacturer’s risk control program. Companies with a robust and well-documented safety culture and program to control risk within their plant are usually rewarded with lower-than-average rates. In this video, I describe these two cost factors and how you can use them to your benefit.

Manufacturers E&O Insurance?

What is Manufacturers E&O Insurance? Why is it needed in addition to your company’s General Liability Insurance?

For manufacturers, E&O covers a risk that’s excluded by your general liability/product liability insurance, and that’s financial damages to a third party (usually your customer) caused by a product defect, delay, or error. This is a critical coverage part for manufacturers and fabricators that work by contract to certain specifications.

When a lawsuit or threat of lawsuit arises for financial damages, and no bodily injury or property damage is suffered, then there is no coverage under a manufacturer’s general liability policy. This dangerous gap can be closed by purchasing Manufacturers’ E&O Insurance. Read more about it in this document.

What is Product Recall Insurance for Manufacturers?

Manufacturers not only face the risk of being sued for a product liability claim when a product they manufacture injures someone or damages property but if that product or batch of products.

Manufacturers face the potential of expensive lawsuits when their product causes bodily harm to someone or damage to their property. But what happens when a product is found to be contaminated, dangerous, or faulty, which could lead to the risk of injuries happening frequently? Does the company’s product liability respond to the cost of recalling a product?

Unfortunately, no. Product liability will not pay for recall costs even if the threat of potential harm is imminent. That’s where specific Product Recall Insurance steps in to pay for the potentially exorbitant costs to remove a product from the market, destroy it, manage the resulting PR crisis, and much more which I describe in this video.

What is the best insurance company for manufacturers?

I get this question very often – what are the best insurance companies to get a quote from for my manufacturing company?

The answer is that there are many A+ Rated insurers that write manufacturing firms, but I can honestly say that there is no one company that is consistently the best. In fact, even if you narrowed it down to who is the best insurer for food manufacturers in New York or New Jersey, I would still say no one company is the best.

So, how do you find the best?

In my opinion, that starts with finding the right broker to work with that represents most of the major players insuring manufacturers. Of course, I’ll tell you that we are that “right broker” that is skilled in insuring manufacturers, and we represent most of the key insurers in this market.

In my opinion, the consistently good insurers for manufacturers we represent, broadly speaking, include Travelers, Chubb, Hartford, Hanover, Liberty Mutual, Nationwide, CNA, and Utica National. There are many others in different niches we represent, but these are the top 8 in my opinion.

Why get Manufacturers Insurance from The Coyle Group?

You have choices, tons of choices when it comes to selecting who you want to insure your manufacturing company, and if you’re online looking for the “right” provider, you may be overwhelmed by all your choices. In fact, a quick Google search for “insurance for manufacturers” returns 686 million web pages! Just thinking about that gives me a headache!

If you’ve looked at any of the videos or content on this page of our website dedicated to manufacturing, you’ll probably learn that, in our opinion, there are four key factors in deciding on who to choose.

  1. Are they skilled and experienced in insuring manufacturing companies?
  2. Do they offer expertise outside of just procuring policies? Will they help you reduce your total cost of risk by working with you and your team to reduce claims and improve risk control?
  3. Do they represent the right insurers who write manufacturing firms?
  4. Do they have a team of experienced account managers to be there when you need them and who you can develop a relationship with?

The Coyle Group does those four things very well in my opinion, and we’d love an opportunity to speak to you about your issues and what’s most important to you when it comes to business insurance.

Read More about Insurance for Manufacturers

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