How Insurance Protects Your Manufacturing Business
Your manufacturing business relies on equipment so that you can meet your customers’ product orders. You need to control any risks that could affect production.
A customized insurance package will protect your manufacturing business in the Greater Toronto Area or anywhere in Ontario, the hub of Canadian manufacturing.
As a Canadian manufacturer, our business insurance experts at Western Financial Group are committed to getting you the insurance you need to protect what you do whether you are a manufacturer of:
- Food and beverages
- Chemicals and plastics
- Textiles
- Automotive
- Petroleum and coal products
- Fertilizer
- Wood, paper, or printing products
- Machinery
- Aerospace parts
- Pharmaceuticals
- Medical equipment
- Rubber products
- Shipbuilding and marine
- Technology/Clean Tech
- Among others
Did you know that Canadian manufacturers export more than $354 billion each year, representing 68% of all of Canada's merchandise exports.
What is insurance for manufacturers?
It’s a customized package that covers all possible risks to protect your manufacturing business.
Manufacturing insurance helps protect you against these 3 claims:
1. An important piece of equipment that produces your goods stops working. Equipment breakdown coverage is designed to protect a wide range of machinery from sudden and accidental breakdown due to an insured peril.
2. A visitor to your manufacturing plant falls on a wet floor and breaks a wrist. Commercial General Liability Insurance, also known as slip and fall insurance, will help cover the medical expenses and legal fees.
3. Your manufacturing plant fails to deliver a product as promised due to a supply chain problem and you get sued. Errors and Omissions (E&O) insurance may cover the financial loss sustained by your client, along with legal fees related to a lawsuit.
How much will my manufacturing insurance package cost?
Factors that will influence the cost:
- Years of experience
- Annual revenue
- Number of employees
- Past claims
Here’s an insurance check list for manufacturing businesses:
- Do you have the best business insurance rate?
- Do you have the right amount for your deductible and regularly review to make sure it’s the right amount for your organization?
- Is your number of employees up to date?
- Are you using personal vehicles for business purposes?
At Western, we will save you time and money by doing the insurance shopping for you to find an insurance package that suits your manufacturing business.
What do I need in my manufacturing insurance package?
Manufacturers’ Errors & Omissions Insurance: It’s also known as professional liability insurance.
E & O insurance protects your manufacturing business from damages due to design, manufacturing, or marketing defects, such as incorrect labelling and safety warnings.
It usually includes coverage for legal costs and damages related to your company’s professional services, products, and media and advertising.
E & O insurance can help protect you if fail to deliver a product or service as promised.
Commercial General Liability (CGL) Insurance: This type of insurance is also known as slip-and-fall insurance because it helps protect you from day-to-day risks that can happen when you are dealing with third parties, such as claims of bodily injury or property damage.
If one of your customers or suppliers slips and falls and gets injured at your business, they could sue for bodily harm.
CGL will typically cover your legal expenses and the customer’s medical fees, regardless of the lawsuit’s outcome.
A CGL policy typically includes product liability coverage, which protects against claims alleging third-party property damage or bodily injury caused by a product you manufacture, distribute, or sell.
Damages covered by product liability may include a defect in the design, manufacturing, or marketing of a product, such as an incorrect label or a lack of safety warnings.
How much CGL insurance do I need?
It depends on what you are manufacturing and the size of your operation.
Speak to your Western business insurance expert about the CGL insurance coverage that you need to protect your manufacturing business.
Equipment Breakdown Insurance: What would the cost to your business be in terms of productivity if a piece of equipment breaks down?
Equipment breakdown insurance provides coverage for property damage from the sudden and accidental breakdown of insured equipment not automatically covered by a standard commercial property policy.
Business Interruption: It supports you when your manufacturing business can’t operate due to a covered loss.
Some examples of coverage include:
- Damage to your storefront from fire or vandalism
- Damage to a neighboring business
- A major reduction in revenue due to a client/supplier facing losses of their own
- A disruption in your supply chain
Business interruption insurance can help with expenses such as:
- Payroll
- Rent
- Utilities
- Property taxes
- Alarm monitoring
- Relocation of your business
Commercial Property Insurance: If you store the goods or products that you make onsite or offsite, you need commercial property insurance.
Commercial property insurance protects your physical location, as well as its contents (including your inventory) from insured risks that occur beyond your control, like a fire, theft, or flood.
Pollution Insurance: It covers third-party bodily injury, property damage, and environmental damage due to gradual or sudden pollution that happens on a covered job site. Coverage generally includes cleanup costs, emergency response costs, and civil fines.
Cyber Insurance: Your system could be attacked by cyber criminals. If you store client information or you processes debit and credit card transactions, you need cyber insurance.
Without cyber insurance, you will have to pay out of your pocket for the cost of restoring your system if it’s hacked.
You may also be liable for damages to third parties whose information has been stolen and you may have to pay for notification expenses to inform customers affected by a breach.
Crime Insurance: It protects you against theft by employees either financial or equipment, credit card fraud, forgery, and counterfeit.
Commercial Auto: If you have a business car, van, or truck that you use for your manufacturing business, it won’t be covered by your personal car insurance policy. You will need commercial coverage as part of your insurance package.
If you own five or more vehicles and use them exclusively for your manufacturing business purposes, such as deliveries, you will need fleet insurance.
What do I do if my manufacturing business has an insurance claim?
- Contact your broker immediately after any business-related mishap. Waiting to file a claim can confuse insurers about the severity of the damages to your business.
- Know your policy so that when you contact your broker you are familiar with what will be covered or not.
- Document the damage. Take photos right away and write down what happened.
- Do not throw away damaged goods after taking photos. Keep the physical evidence so that your adjustor can see it.
- Do not invite lawsuits. Don’t say anything that could be used against you, especially if you aren’t sure what happened.
- Be honest about what your damaged property is worth. Damaged commercial property is generally valued according to its actual cash value or replacement value.
Western Financial Group has licensed BUSINESS INSURANCE EXPERTS to get your manufacturing business the right insurance package. Our experts are available now to help you navigate the business insurance journey to protect your manufacturing business.
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