Machine Shop Insurance Virginia Policy Information
Machine Shop Insurance Virginia. As a machine shop owner or operator, you offer a variety of products and services to the clients that you serve. For example, you might create unique items for your customers, or you may offer repair services for companies that utilize certain types of machinery. Machine shops in VA receive unfinished parts from customers, generally manufacturers, and then grind, bore, or perform other processes based on the customers' specifications.
The traditional job shop does a low volume but offers high-quality work, such as grinding teeth into gear blanks or boring precision holes into forged or cast parts. Other job shops handle high-volume work, commonly using computerized (CNC) lathes to thread screws, bolts, and similar items.
Larger shops may provide expanded services to include such finish work as deburring, heat treating, or electroplating. The shop's specialty is often based on the equipment that they have available. Like contractors, they may bid on jobs and receive contracts with set terms and conditions.
No matter what the specifics of your business may be, as the proprietor of your machine shop, you have a lot of responsibilities and are liable for any mishaps and mistakes that can happen. In order to ensure that your employees and customers are safe and satisfied - and in order to ensure that your business is safe and you are protected - it's important to make sure that you carry the right type of insurance coverage.
If you've just opened your own shop, trying to navigate the world of insurance can be confusing. To help you make the best possible choices and to ensure that you are well protected, keep on reading to find out why insurance is so important and what type of machine shop insurance Virginia coverage you should invest in.
Machine shop insurance Virginia protects custom machining, electroplaters, foundries, machine parts manufacturers, or metal finisher operations from lawsuits with rates as low as $77/mo. Get a fast quote and your certificate of insurance now.
Why do Machining Shops Need Insurance?
Running a machine shop can be extremely rewarding; however, it also comes with a lot of responsibilities. Third-parties or employees could become injured, your equipment could malfunction or become damaged, the property your shop is located in might be vandalized, or a client could file a lawsuit against you alleging that a member of your crew damaged their property.
The above-mentioned scenarios are just some of the incidents that could arise. If something serious should happen, as the proprietor of the business, you will be held liable. That means that you could end up having to pay a significant amount of money in order to repair or replace damaged property, cover the cost of medical expenses, and pay for legal fees. Having to pay such costs could put you in financial ruin. Ultimately, you could end up filing for bankruptcy or even having to shut down your business.
Having the right type of machine shop insurance Virginia coverage will protect you from financial burden. Should a client become injured while visiting your shop and file a lawsuit, for example, commercial insurance will cover the cost of any necessary medical bills, as well as legal fees.
What Type Of Insurance Do Machine Shop Owners Need?
Do to the nature of owning and operating a machine shop, there are several different types of insurance policies that are recommended for individuals in this industry. Some coverages are compulsory, meaning that you are legally required to carry them, and some are optional; however, it is strongly recommended that you consider investing in the policies that you aren't obligated to carry in order to avoid serious losses and financial hardship. Some of the types of policies that machine shop owners should carry include:
- General Liability. You probably have a lot of heavy machinery at your shop. Should a customer, vendor, or any other third-party become injured by any piece of machinery, bodily injury insurance will help to pay for the necessary medical care. It will also help to cover the cost of legal fees should a lawsuit be filed against you.
- Commercial Property. This type of coverage protects your business - both the physical structure and the contents inside of it - should an act of nature or vandalism occur.
- Products and Completed Operations. If any of the products that you offer or the services that you provide malfunction and harm a customer after the service or purchase was completed, this type of insurance coverage will protect you.
- Workers' Compensation. When a member of your staff is injured on the job or suffers a work-related illness, workers' comp insurance will pay for the employee's medical care, lost wages, and even any job training that he or she might require. It can also cover legal fees, should the injured employee file a lawsuit against you.
These are just some of the different types of policies that machine shop owners should carry. You can purchase individual policies; or, you might be able to invest in a policy that lumps several different coverages together.
VA Machining Risks & Exposures
Premises liability exposure is higher than for other metal working operations as customers need to be on premises to review the process and to evaluate the ability of the firm to deliver the product desired. If customers put their own employees on site for quality control purposes, these employees are subject to the same hazards as the machine shop's employees. Other visitors may be injured by slips, trips, or falls. Fumes, dust, and noise from metal work could affect neighboring properties.
Products liability exposure may be very high if the final product is a critical operating part or system (such as parts for autos, aircraft, watercraft, military uses, or industrial machinery). The machine shop may be more concerned about their ability to handle the customer's specifications rather than evaluating the end use of the product and what could happen should the part fail.
It may be impossible to defend against questionable claims unless there is an aggressive quality control program including high standards for materials, testing and monitoring of components, and documentation of sources (often down to the individual item in a run). If the machine shop is following specifications provided by the customer, the contract may limit the exposure. Hazards increase without contracts that clearly describe the responsibilities of the machine shop and the quality standards that must be met for customer satisfaction. Older parts made before improved safety features were introduced may still be in use.
Environmental impairment liability exposure may be significant due to possible contamination of ground, air, and water from the chemicals, paint, and solvents used. Disposal of wastes must adhere to all federal and state guidelines.
Workers compensation exposure is moderate to high. Workers on a production line with punch presses and cutting machines can suffer severe loss from cuts or amputations as they push to meet quotas. Eye injuries from metal shavings and skin irritations from chemicals are additional causes of loss. Common injuries include slips, trips, falls, back injuries from lifting and material handling, hearing loss from noise, and repetitive motion injuries.
Workstations should be ergonomically designed. Employees should be provided with safety training and protective equipment. Jobs are bid and deadlines set with penalties if timeframes are not met. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair to increase production.
Property exposures consist of an office, production plant, and warehouse for storage of raw materials and finished goods. Ignition sources include electrical wiring, heating systems, production machinery, and sparks from grinding or lathe operations. Many stages of the work have low fire potential since most machines are cutting and punching devices, and the parts are all metal.
Grinding and lathe operations may generate dust and sparks that could cause a fire or explosion. The risk increases in the absence of proper dust collection systems, ventilation, and adequate disposal procedures. Degreasers and solvents may be flammable and must be adequately controlled. Poor housekeeping may be a serious fire hazard. Unless disposed of properly, greasy, oily rags (such as those used to clean the machinery) can cause a fire without a separate ignition source.
There is often a significant amount of property of others exposure that may be better insured on an inland marine bailees customers form. Business income can be a significant exposure if the machines are special-ordered for a specific job.
Equipment breakdown exposures include malfunctioning production equipment, electrical control panels, and other apparatus. A lengthy breakdown to production machinery could result in a severe loss, both direct and under time element.
Crime exposures are chiefly from employee dishonesty, especially for high-tech parts or exotic metals. Background checks should be conducted on all employees. There must be a separation of duties between persons handling deposits and disbursements and handling bank statements. The manufacturer should have security methods in place to prevent theft.
Inland marine exposures include accounts receivable if the manufacturer offers credit, bailees customers for goods belonging to others, computers (which may include computer-run production equipment), goods in transit, and valuable papers and records for customers' and suppliers' information. Items being treated that belong to customers are subject to the same causes of loss as property owned by the machine shop, plus transit and the processing itself. For goods in transit, the primary causes of loss are fire, theft, collision, overturn, and water damage.
Business auto exposure can be high if the machine shop picks up raw materials or customers' property or delivers finished parts. Deadlines placed on drivers (such as just-in-time processing schedules) increase the hazard. Drivers should be trained in handling whatever product they are required to carry, including the tie-down of unwieldy pieces of metal.
Manufacturers generally have private passenger fleets used by sales representatives. There should be written procedures regarding the private use of these vehicles by others. Drivers should have an appropriate license and an acceptable MVR. All vehicles must be well maintained with documentation kept in a central location.
Machine Shop Insurance Virginia Coverage
For the safety of yourself, your employees, and your livelihood, having the right VA machine shop insurance coverage is essential. To find out what types of options are available to you, how much coverage you should invest in, and how much your coverage will cost, speak to a reputable insurance broker.
Virginia Economic Data & Small Business Insurance Information
If you're planning on starting a business, a lot of planning and factors need to be taken into consideration. Of course, having a great business model and offering valuable products and services are all keys to your success; however, there's something else that you need to take into consideration: where you're going to set up shop.
In order to reap the success that you hope for, you need to choose a location that offers favorable conditions for your specific business. If you operation isn't located in a location that can benefit from what you plan on offering, you aren't going to achieve the success that you desire.
For entrepreneurs who are thinking about Virginia as a location for their headquarters or a branch of their company, it's important to familiarize yourself with the economic trends in the commonwealth. It's also essential that you have a keen understanding in regard to the type of insurance coverage you'll need to carry to protect yourself, your clients, and your employees.
Business Economic Trends In Virginia
In regard to job growth, VA exceeds the rate of national job growth. As of February 2020, unemployment rates were at a historic low in The Volunteer State, with a rate of 3.2% throughout the state; 0.1% lower than the last historic low of 3.3% in October of 2018. That's lower than the national unemployment rate, which was reported to be 3.8% in February of 2019. Economists are forecasting continued job growth throughout the state into 2020.
The Commonwealth of Virginia has seen a dramatic upswing in economic growth in recent years. As of late 2020, the unemployment rate had fallen to a record low of just 2.9 percent; a significant difference compared to the national unemployment rate, which was 3.7 percent. In a one-year period, nearly 65,000 jobs were added. In 2019, the unemployment rate and economic growth of the state continues to be positive, and it expected to remain in the green well into 2020 and the future.
In regard to areas that offer the most favorable conditions for business owners, there are several. Metropolitan areas, including northern (Arlington, Fairfax, etc...), central (Richmond, Ashland, Lynchburg, etc...), and southern (Chesapeake, Newport News, Hampton, Norfolk, etc...) all afford great opportunities for entrepreneurs. However, virtually any location in the Commonwealth of Virginia can be considered favorable for business owners.
Industries that offer great promise in Virginia include:
- Education and training
- Information technology
- Travel and tourism
Commercial Insurance Regulations & Limits In VA
The Virginia Bureau of Insurance regulates insurance in Virginia. Just like any other state in the country, there are regulations in place regarding commercial insurance. Business owners are required to carry certain types of coverage to protect themselves, their clients, and their employees.
Small businesses with 2 or more employees are required by VA state law to have workers comp insurance coverage.
If you use certain types of motor vehicles for business-related purposes, you'll also need to invest in commercial auto insurance coverage to protect your drivers, as well as other drivers on the road.
Additional Resources For Manufacturing & Wholesaler Insurance
Read informative articles on small business manufacturing and wholesale insurance. Manufacturing and wholesale companies face many risks due to the nature of their business operations.
- Canned Fruit & Vegetable Manufacturers
- CBD Oil And Hemp
- Machine Shop
- Product Liability
- Wholesaler Distributor
For manufacturers and wholesalers, having the proper coverage is very important. You will need Products/Completed Operations Liability Coverage to protect you against injuries or property damage cause my the products you make or sell.
Manufacturing is an extremely broad category that includes countless potential hazards and exposures in virtually all coverage areas. Because of this, every individual manufacturer is unique and a specific risk survey of every operation is advisable.
The basic insurance needs for every class of business or operation includes property coverage for buildings, machinery and equipment, as well as for raw stock and finished products. Liability insurance for premises exposures is important but products liability insurance presents greater concerns so these exposures and coverage needs must be evaluated carefully.
In addition, protection for injuries to workers, environmental coverages and automobile insurance are priority items.
Wholesale and distribution operations have many of the same physical damage and property coverage concerns as warehouse operations. In both, the value of both real property and stocks of merchandise is very high. Loss control and other techniques appropriate to the types of merchandise involved are needed. For these reasons, adequate and appropriate property insurance coverages are important.
The commercial auto exposure can also be significant, based on the extent of merchandise delivery. In addition, transportation or motor truck cargo insurance on the merchandise must also be arranged.
Employee theft is always an issue and can be a significant exposure, depending on the type of property involved. Finally, the types of merchandise and material handled makes workers compensation insurance another very important coverage.
What does the insured does that could result in a covered loss? The insuring agreement only requires that the insured be legally obligated to pay damages for injury to others or damage to their property included within the products-completed operations hazard covered by the insurance.
Because of this, every product manufactured and completed operation exposure for each named insured must be determined, described and evaluated to be certain that each represents acceptable exposures, or are acceptable classes of business to the insurance company providing coverage.
Once the extent of all business activities and operations is determined, the process of identifying hazards begins. The first step in the process is completely listing and describing all current products being manufactured and projects being worked on.
The next step is obtaining the same information for discontinued products and completed projects for the past five to 10 years, depending on the products or projects involved. This should include an explanation of why the products were discontinued. If some completed projects were of a different type than those currently being worked on, an explanation is in order, including whether the insured may resume them in the future.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Bailees Customers, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.
Request a free machine shop insurance Virginia quote in Alexandria, Annandale, Arlington, Ashburn, Bailey's Crossroads, Blacksburg, Bon Air, Brambleton, Brandermill, Bristol, Broadlands, Buckhall, Bull Run, Burke, Burke Centre, Cave Spring, Centreville, Chantilly, Charlottesville, Cherry Hill, Chesapeake, Chester, Christiansburg, Colonial Heights, Culpeper, Dale City, Danville, East Highland Park, Fair Oaks, Fairfax, Falls Church, Fort Hunt, Franconia, Franklin Farm, Fredericksburg, Front Royal, Gainesville, Glen Allen, Great Falls, Groveton, Hampton, Harrisonburg, Herndon, Highland Springs, Hollins, Hopewell, Hybla Valley, Idylwood, Kings Park West, Kingstowne, Lake Ridge, Lakeside, Laurel, Leesburg, Lincolnia, Linton Hall, Lorton, Lynchburg, Manassas, Manassas Park, Martinsville, Marumsco, McLean, McNair, Meadowbrook, Mechanicsville, Merrifield, Montclair, Neabsco, Newington, Newport News, Norfolk, Oakton, Petersburg, Portsmouth, Radford, Reston, Richmond, Roanoke, Rose Hill, Salem, Short Pump, South Riding, Springfield, Staunton, Sterling, Sudley, Suffolk, Timberlake, Tuckahoe, Tysons, Vienna, Virginia Beach, Waynesboro, West Falls Church, West Springfield, Williamsburg, Winchester, Wolf Trap, Woodlawn and all other cities near me in VA - Old Dominion.
Also learn about Virginia small business insurance requirements for general liability, business property, commercial auto & workers compensation including VA business insurance costs. Call us (703) 747-9779.