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May 8, 2023

Having the right insurance is important in the manufacturing industry. You need to prepare for days when things don't go as smoothly as planned.

Every industry has unique insurance needs. Manufacturing insurance should include general liability, commercial property, business income, and professional liability.

Your business insurance can be combined into one package for a more cost-effective option.

Are you in the manufacturing industry and in need of commercial insurance? Keep reading for ten questions to ask a manufacturing insurance agent.

1. What Does Manufacturing Insurance Cover?

There is a long list of coverage for a manufacturing business. Each business has to determine which coverages they need. Choosing the right insurance agent goes a long way in ensuring that you have the right policies in place.

Here is a list of common policies to consider for the US manufacturing industry.

  • Commercial Policies
  • Auto
  • Property
  • Cyber Liability
  • General Liability
  • Product Liability
  • Workers' Compensation

Once you get into special circumstances, you'll need additional coverage. These can include equipment coverage, Inland Marine, and bonds.

2. Best Policy Types

Depending on your business size and what you produce, you can go with a business owner's policy or a commercial insurance package. Choosing one of these for your manufacturing business allows you to combine the coverage you need into one policy.

BOPs come with savings benefits.

3. How are Manufacturers Rated?

When getting quotes for any line of business, asking how you're rated is a good idea.

Different lines of business use different factors to determine their rating. Some carriers might use gross sales, the occupied area of the building, or even employee payroll.

Ensure you're being rated right. If manufacturing insurance policies aren't rated correctly it can cost you money. That way, there won't be any surprises if you ever have an audit or a claim situation.

4. What is BOP Insurance?

A business owner's policy is a type of insurance policy that combines different types of insurance. In one convenient package, the BOP can include commercial property, general liability, and business income.

It's important to remember that you should choose coverage that's specific to your industry. Some types of insurance don't come with a BOP. Auto, workers' compensation, and employee benefits are excluded.

Your agent will tailor your policy to fit the needs of your manufacturing businesses.

A BOP policy covers businesses that are not home-based and have fewer than 100 employees. Your annual revenue must be under $5 million, and you want to protect property or equipment. Remember that a BOP won't cover every risk and won't work for every industry.

5. How Does Product Liability Work?

Product liability insurance is more than just a product warranty or guarantee. It's a way for businesses to protect themselves if their products cause harm to others.

Consumers can be hurt by the way a product is made, marketed, or used. Even if the product is used incorrectly, your business could be held responsible for any damage that happens.

A product liability lawsuit can be a costly and stressful experience. Product liability insurance helps cover the legal costs that tend to be expensive. It also covers medical expenses, business, and compensatory damages.

6. Do I Need Equipment Coverage?

Having equipment breakdown insurance is a smart move if you don't own your building. Like most companies, your business relies on equipment that operates on electricity or gas supplied by a power company.

Your commercial property insurance will cover damage caused by an external cause like a fire. Equipment breakdown insurance covers damage caused by internal forces like power surges, electric shorts, mechanical failures, motor burns out, or operator mistakes.

7. What is Umbrella Insurance?

Suppose you're looking for extra insurance that goes beyond what your other policies cover. In that case, umbrella insurance is the way to go. It can cover you for anything from injuries and property damage to certain lawsuits and liability issues.

Commercial umbrella insurance is a great way to get extra protection since it covers costs that go over your other limits. It's like having extra insurance that takes over when you reach your other limits.

For example, if you're sued for a vendor's injury at your plant, you only have liability coverage of $1 million. The customer is suing you for $1,500,000, so your commercial umbrella could cover the difference, depending on the policy's coverage limits.

8. Can You Explain E & O Coverage?

Errors & Omissions insurance is a form of professional liability insurance. It helps protect employees and employers from clients who sue them for negligence or bad work. It usually covers the legal costs of the claim and all or part of the settlement.

You're responsible for the balance when the amount exceeds the policy limit of the settlement.

Suppose your business is concerned about losses due to a product failure that results in a third-party lawsuit. These claims involve third parties who have lost money but have not suffered property damage. You should discuss E & O coverage with your agent in that case.

9. Are Changes Coming for My Industry

There is a rise in robotic technology, machine connection, data gathering, and data analysis in the manufacturing sector. Technology will make your workplace safer, more efficient, and more productive.

Implementing updates that improve safety ratings can positively impact your safety premiums and change how they're rated from a higher to a lower class code.

It's important to notify your insurance agent of any upgrades in equipment and technology.

10. Can Hummel Group Insure Us?

We have a few agents who specialize in the manufacturing industry and have years of experience in this field. They have the know-how and carriers to cover manufacturing plants of all sizes.

Let Hummel Provide You With a Quote

The Hummel Group provides manufacturing insurance. We'd love to provide your business with the coverage you need if the unexpected happens.

We have seven locations with over sixty years of insurance experience.

Getting a quote is quick and easy. Start your quote now, and get the right coverage for your business needs.

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