Posted on May 17, 2014
Safety of workers and products is a primary concern for most manufacturing and distribution companies. Companies in this industry typically have many employees in warehouses and factories that are exposed to numerous physical, chemical or electrical hazards so keeping a safe work environment is high priority. Proper employee training, risk reduction strategies and emergency preparedness are not the only necessary steps that manufacturers and distributors must take.
No matter how safe the work environment, accidents do happen. Having the proper type and amount of business insurance for protecting operations, employees and customers is just as important to reduce risk and properly provide for injured workers or visitors. While each company?s factory, warehouses and distribution centers will have their own unique insurance needs, most companies within this industry rely on the following coverages to insure their businesses.
General Liability and Property Insurance
Most manufacturing companies will have standard liability and property insurance coverage in place to protect from financially damaging lawsuits and potential property damage caused by fire, theft or explosion. These two types of policies are the cornerstones of every comprehensive insurance protection plan, but manufacturers and distributors will need specialized insurance to provide added protection not commonly covered within general property and liability policies.
While general liability provides a measure of protection adequate for most small businesses manufacturing and distributing companies must pay special heed to the inherent risk in making and supplying products or goods to the general public. If a food manufacturer creates a product that makes large groups of people ill, that company faces the potential for lawsuit that could wind up costing large sums of money. Product liability insurance protects companies should their product malfunction or cause illness. Recalls can be extremely expensive endeavors, and product liability insurance protects companies from this expense when necessary. Manufacturer?s product liability insurance will also pay for legal defense costs and any award of damages if a company is found financially responsible for injury.
Even when companies have spent thousands of dollars on safety equipment and training, workers will find ways to injure themselves. When this happens, workers compensation insurance pays medical treatment and wage replacement for employee work related injuries and illnesses. Most states mandate this coverage so all manufacturing & distributing companies will need to purchase this insurance from private workers comp carriers or apply for self-insurance.
Even after choosing the best business coverage available, companies still need to determine the right amount of insurance needed to keep operations fully protected. That is where an experienced insurance broker or agent can help. Commercial insurance experts can help business owners properly assess the level of risk and amount of assets needing protection and then create an insurance plan to maximize benefits while meeting financial goals.