Insurance for manufacturing

Manufacturers Insurance

Whether it's Machining in Mablethorpe or Furniture making in Metheringham, manufacturing comes with many risks and exposures. Having manufacturer's insurance in place should the worst happen will ensure your business is up and running as soon as possible with the least disruption.

Insurance for a manufacturing business is designed to cover a wide range of exposures and risks, from the obvious such as fire or storm damage, to liability insurance that protects your business against legal action due to allegations that you have caused a loss, damage or injury to a member of the public.

As a manufacturer, liability insurance is one of the critical elements that make up any protection program; by the very nature of manufacturing, you are producing products, which means you need robust insurance should your product cause loss or injury.

What is manufacturers' insurance?

The words manufacturing insurance is just a catchall phrase for insurance designed to protect the business as a whole, premises worked from, the machinery and plant used in the manufacture or assembly process, as well as essentials such as stock, in fact, providing comprehensive cover than in the event of a loss cover is in place, so you don't have to worry about the financial consequences, your insurer is paying so you don't have to.

Insurance for a manufacturing business usually isn't just something that you buy off the shelf as a one size fits all offering. After all, no company is the same as the next it's slightly more complex than that. The good thing, though, is that for many trades, there are insurance policies available that are specific to particular sectors, Engineers, the Plastics industry, such as plastic injection moulders, and the Print sector, to name a few.

These types of Commercial Combined Insurance policies are available because certain kinds of businesses have special needs that other businesses don't; the metalworking industry spans many specialisms, for instance, so a policy will be designed with extra covers built in. A print industry policy, for example, should include some aspects of cover, copyright breach or bookbinders cover, great covers for printers, not so for those involved in wood or metal.

Ideally, all businesses would fit one policy, but that is only sometimes the case. Usually, a manufacturing business would have insurance that spans many covers, some built-in, some optional. A few examples would be.

Property Damage Insurance would cover your building if you own it or are responsible for it, the machinery used to manufacture or assemble your products, such as process machinery, conveyor and packaging systems, or if you are a micro business, you might just use manual machines and benches. With modern manufacturing, it's likely for many to have technology in control of the manufacturing process, from Computer-Aided Design to Computer Aided manufacture (CAD/CAM), such as CNC Machinery and other Automation installations. These can be costly items of kit, and therefore a thought in-depth insurance program needs to be in force covering the standard natural perils such as Storm, Fire, and in more recent times, the increasing risk of flood, right through to machinery breakdown cover as this keeps your business machinery covered should it stop working because of sudden and unforeseen damage, getting you back to production as soon as possible.

Stock Insurance is vital. Whether you are buying component parts, manufacturing complete components or producing parts for assembly, stock insurance will provide that essential insurance protection against loss or damage to the business stock, work in progress and finished, whether at your own premises or at those of customers or suppliers. And if you do suffer a loss, it's essential that the downtime is limited. That means cover such as Business Interruption will provide that critical safety net, keeping your business in business should the worst happen.

Business interruption will provide critical cover paying for things such as overheads of the business as well as wages and other business costs. With the policy intention of putting your business back in the same position as it was before the loss happened, you must have the business interruption indemnity period correct; this is where we at Sills Insurance can help you decide on the best way forward. A business interruption indemnity period is the length of time your insurer will continue to pay, so it's crucial this period of cover is correctly thought through, taking such things as building repairs and rebuilds, machinery replacement lead times as well as availability into account. We can help you with this.

Other essential insurance covers for businesses that manufacture are;

Goods in Transit, covering your goods from A to B, providing protection against damage or even theft whilst in Transit from your premises to your customer's delivery address. While physical money may be considered somewhat old-fashioned, many businesses still rely on it. You can protect your business money whilst on your premises, in Transit to a bank or even if you take it home.

Manufacturer Product Liability Insurance

One of the most essential insurance covers a manufacturer needs is Product Liability Insurance. Product liability insurance provides defence should one of your products cause loss, damage or injury to a third party; a third party can mean a member of the public, for instance. If you are negligent, your insurer will also pay the compensation up to the indemnity limit on your policy.

An indemnity limit is a maximum amount an insurer will pay in the event of a loss, this can vary, but luckily insurers provide simple options such as £2m or £5m with options to increase further to £10m and beyond if required.

A typical example of a product liability claim could be something as simple as your product breaking whilst it's being used, or a spillage of your product that might cause a burn or irritation to the user's skin. Allegations of food poisoning or even incorrect instructions or translations on product usage contribute to a claim against the business.

Of course, your insurer isn't just going to pay out a claim. They will provide that critical legal defence for a start, and only if you have been found negligent will they pay the compensation.

Is Public Liability Insurance covered in a manufacturer's policy?

Public Liability and Product Liability insurance are a little like twins; they come as a package, and whilst one may stray from the other, they can usually be found together.

Like Product Liability cover, Public Liability Insurance will respond to allegations of negligence against a third party. Still, instead of the product causing the problem, it's the negligence of the business or the action of the company or an employee that causes the claim.

A public liability insurance claim can come from many directions; it could be at your premises or whilst at customers. The pile of boxes left in your reception that a customer falls over, the pallet poorly placed in your yard where customers have access or even trampling over a customer's carpet, leaving oily footprints whilst you are delivering their goods.

Public Liability is essential, but its importance cannot be overstated; it needs to be in place and well thought through to provide that vital cover. Discuss your business needs with us, and we can advise on all types of essential aspects of your liability insurance.

Do I need Employers Liability as a manufacturer?

Yes, although there are exceptions; however, it's safe to assume that if you have employees or are better phrased, "people who work or provide labour or skills to you," then it's a statutory requirement, which means it's required by Law.

As a manufacturer, your employees are exposed to all sorts of different processes and procedures, some safe, and some not, and whilst you might have the best health and safety processes in place, injury or illness can still occur.

Employers Liability for a manufacturer will not only pay for injury or illness to your employee, but it will also provide your business legal defence and compensation where necessary.

Manufacturers insurance - additional cover you can't do without.

Shipping your products worldwide means they need protection from not only the elements, but theft, damage in Transit and similar. Marine insurance can be arranged very competitively, covering your goods from leaving your premises to your customer's doorstep on the other side of the world.

Directors & Officers Liability insurance protects the directors and officers of the company against actions taken against them due to a wrongful act, discrimination, wrongful trading, and breaches of trust; the list is endless. Whilst a limited company is limited Liability, as a director of a company, there is no such limit.

Directors & Officers liability insurance usually forms part of a broader Management Risks insurance package, providing a much more rounded cover such as protecting the entity itself and Employment Practices Liability, comprehensive cover against employment issues such as tribunals.

Cyber Insurance - Consider what would happen if your business couldn't trade, for an hour, a day, or a week, if you had innocently been paying invoices to the wrong account, if your production process had technical issues and were on your main network. You can be mistaken in thinking that

Cyber attacks only happen to larger businesses; in fact, hackers are not interested whether you are big or small; small businesses can be much more vulnerable than larger companies. A Cyberattack can cost you dearly, directly in terms of the financial cost, such as redirection of invoices payments, to reputational damage. Please speak to us about Cyber Insurance; we can build the product into your broader insurance program. And just remember, it can happen to any business.

Commercial Legal Expenses Insurance is included as standard in many policies; it's available as a stand-alone product too. We believe this is invaluable, and whilst the policies on respond where there is a 51% chance or higher of success, they come with many covers built-in, HMRC disputes, employment protection such as tribunals, breach of contract disputes as well as the various business helplines and document library free for you to use.

Why use Sills insurance for your Manufacturing insurance?

We are a specialist commercial insurance broker; we have a traditional approach where we speak to people, understand their business and provide the right products and protections. All the commercial team are experienced and knowledgeable, so we don't leave you to figure it out for yourself. And, we are not a Call Centre!

Some of the specialist areas we deal with;.