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It’s highly likely that any manufacturing business will want to have a comprehensive business insurance package in place. Due to the nature of the work carried out and the machinery often used in the manufacturing industry, there are a number of risks in everyday operation that could potentially pose a financial threat to your business.
For example, if a piece of essential equipment fails then you may need to pay for replacement or repairs, which could be extremely costly - or even unaffordable. Or if an employee suffered an accident at work, your business may need to pay for a legal defence and possibly compensation in the event of a claim.
Manufacturing insurance isn’t actually a policy in itself - it’s a broad term referring to a range of different insurance policies. The policies included in this package will differ for each manufacturing business, as no two businesses are the same or are exposed to the same risks.
Here are some of the core policies you might decide to include in your own insurance package:
This type of insurance could offer protection if a legal claim is made by a customer or member of the public if they are injured – or their property is damaged – while on your premises.
If a product you manufacture causes injury or illness to a member of the public, or damage to their property, you could be held liable. If a legal case is then brought against you as the manufacturer, a successful claim on a product liability insurance policy could pay for any resulting legal fees or compensation.
If an employee makes a claim against you for injury or illness sustained as a direct result of doing their job, then employers’ liability could cover legal costs and compensation. It is usually a legal requirement to have this policy in place if you employ staff.
Buildings insurance could help to pay the costs of repairing the bricks and mortar of your business premises, if damage is caused by an incident such as a fire or flood. However, if you rent your business premises, this insurance might already be in place, so we recommend checking with your landlord first.
This cover could protect you against loss of earnings or profit you may suffer if your business is unable to trade at full capacity for a time. This could happen if, for example, a neighbouring business suffers a fire or flood and you're unable to access your premises - or if one of your key suppliers is experiencing problems which mean you have to stop manufacturing while you source a new supplier. In this circumstance a successful business interruption claim could pay for lost revenue and ongoing overheads while the new supplier is sourced.
Including tools or equipment cover as part of a contents insurance policy could help to fund the costs of repairing or replacing your business apparatus if it is damaged, lost, or stolen. For instance, if one of your employees breaks an expensive, integral piece of equipment, then a successful claim could reimburse you and help to replace this item.
For manufacturers regularly transporting goods between different locations, a goods in transit policy could offer financial protection if your business stock, equipment, or tools are damaged, lost, or stolen during transit.