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Auto Parts Manufacturers Insurance Policy Information

Auto Parts Manufacturers Insurance

Auto Parts Manufacturers Insurance. The automobile parts industry is a highly dynamic field projected to grow as demand in emerging economies spikes. This industry is responsible for the manufacture of a broad range of truck and auto parts, ranging from batteries to filters, underbody components, cooling systems, and engine parts.

As new technologies enter the race to produce vehicles uniquely adapted to the 21st Century, parts that will enable autonomous driving join this growing market.

Automobile parts manufacturers produce a wide variety of components used to manufacture, maintain or repair automobiles, buses, motorcycles, trucks, or other vehicles. Goods can range from the production of various parts and components to finishing or assembling parts manufactured by others.

Operations may include metal casting, electroplating, heat-treating or deburring, sheet metal work (rolled metal stamping), molding and extrusion of plastics, welding, spray-painting, and fabric upholstering.

To secure their place in the market and keep growing in the future, manufacturers in the auto parts industry need more than innovation, however. Like everyone else, they need insurance, too.

Why does every auto parts manufacturing operation need commercial insurance? What kinds of auto parts manufacturers insurance are unique to the industry, and perhaps most importantly, why can it be so hard for auto parts manufacturers to obtain the right type of coverage? Read on to find out what you need to know.

Auto parts manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.

Below are some answers to commonly asked auto parts manufacturing insurance questions:


What Is Auto Parts Manufacturers Insurance?

Auto Parts Manufacturers Insurance is a type of insurance that provides protection to manufacturers of automobile parts and components. It covers a wide range of potential risks and losses, including property damage, liability, product liability, and business interruption. This insurance is designed to protect auto parts manufacturers from financial losses due to accidents, theft, fire, natural disasters, and other unexpected events.

It is also designed to protect manufacturers against claims made by customers or other third parties who may have been injured or suffered damage due to the use of their products. Auto Parts Manufacturers Insurance is an important investment for manufacturers, as it provides peace of mind and protection against potential financial losses.

How Much Does Auto Parts Manufacturers Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small auto parts manufacturing businesses ranges from $57 to $89 per month based on location, size, revenue, claims history and more.


Why Do Auto Parts Manufacturers Need Insurance?

Insurance For Manufacturers

Auto parts manufacturers insurance is your safeguard against catastrophic financial losses and unforeseen circumstances. Auto parts manufacturing businesses face a range of risks. Some of those risks are common to all commercial ventures, regardless of industry, while other risks are unique to the auto parts industry.

Your manufacturing plant could fall victim to damage caused by an act of nature or a fire. Theft and vandalism can strike any industry. Workers may be injured in the workplace as a result of human error or the malfunction of equipment used in the manufacture of auto parts.

Companies that supply auto parts can be held liable for defective parts that result in vehicle accidents, alongside auto makers.

Because of the nearly unlimited potential for liability, some insurers will simply be unwilling to take on the risk involved. This means that auto parts manufacturers have the responsibility of sourcing an insurer with a deep understanding of their industry.


What Type Of Insurance Do Auto Parts Manufacturers Need?

Auto parts manufacturers will need to carry a broad range of insurance policies to protect their ventures from disaster and liability. The exact types of insurance a manufacturer will need to invest in depend on many factors, from the precise nature of their manufacturing process to the size of their business and the location of their plant.

Because every company will have unique needs, it is always essential to consult an experienced insurance agent who specializes in auto parts manufacturers insurance policies. Some types of insurance, however, will be of key importance to every auto parts manufacturer. Some of them include:

  • Commercial Property: This type of insurance is a must for any commercial property. It will cover your auto parts company in case you are hit by an act of nature or a fire, but also theft or vandalism, and commercial property insurance serves to protect both the property and the contents within.
  • Commercial General Liability: This type of insurance is especially important for auto parts manufacturers, as it offers coverage for third-party property damage or personal injury caused by your products. Commercial general liability insurance covers legal expenses and settlement fees in the event of a lawsuit, resulting, for instance, from vehicle accidents in which a defective part manufactured by your company plays an alleged role.
  • Equipment Breakdown: Several categories of equipment breakdown insurance exist. For auto parts manufacturers, for instance, mechanical equipment breakdown insurance will partially cover the cost of repairing or replacing manufacturing equipment, as well as revenue lost to these breakdowns.
  • Workers Compensation: In case a worker sustains an injury in the workplace, which could include a fall due to a greasy work floor or a work-related injury that occurs during the manufacturing process itself, it is important for an auto parts manufacturer to have the correct workers' comp insurance. This kind of policy is used to cover workers' medical expenses as well as lost wages should the employee not be able to return to work.


These are just some of the types of auto parts manufacturers insurance coverage you should carry. You can carry individual policies, or opt for a commercial package policy that combines several different types of coverage under a single policy.

Auto Parts Manufacturing's Risks & Exposures

Manufacturing

Premises liability exposure is normally low due to limited access by visitors. If tours are given, visitors may be injured by slips, trips or falls. Fumes, dust, and noise from processing could affect neighbors, resulting in nuisance claims.

Products liability exposure can be light for interior or exterior trim or upholstery or a non-operative part such as air conditioning or sound systems. The exposure increases substantially if the manufacturer produces a critical operating part or system (such as parts for engine, transmission and power train, steering and suspension, axels, braking, fuel control) or a critical safety component such as passenger restraining devices.

Warning labels regarding dangers of personal injury are important, but provide only limited defense as courts commonly apply strict liability standards to inherently dangerous products. Malfunction in the wiring could present a fire or an electrocution hazard.

A defect in the fuel lines or gas tank could result in an explosion. Well-maintained vehicles may have a long life span and include older equipment made before improved safety features were introduced.

Environmental impairment exposure can range from moderate to high due to the potential for air, land and water pollution from dust and fuel storage tanks. Raw plastic materials may be toxic and are flammable, the catalysts may be caustic, and the final product is usually not biodegradable.

Metal contaminants may come from the chemicals, paints, and solvents used. Vapors, fumes and air pollutants as well as wastewater and disposal of by-products must be evaluated and controlled. Disposal of plastics, chemicals and flammable liquids must adhere to all EPA and other regulatory standards.

There may be fuel tanks on premises with the potential for spillage and contamination. If there are underground tanks, a UST policy may be required.

Workers compensation exposure is moderate to high. Injuries from production machinery are common, as are minor cuts, burns, slips, trips and falls, foreign objects in the eye, back injuries from lifting, hearing loss from noise, and repetitive motion losses. Workstations should be ergonomically designed.

Employees should be provided with safety training and protective equipment. Areas that generate dust require respiratory protection devices, as well as eye protection and eye wash stations. Metalworking can result in injury from cuts, amputations, and burns from welding and heated metal, exposure to dust, and respiratory problems from spray paint and solvents.

Plastics have similar exposures, plus a potential for burns from heated machinery and eye and skin irritants from chemicals and resins.

Property exposure consists of an office, production plant, and warehouse for storage of raw materials and finished goods. Ignition sources include electrical wiring, heating systems, production machinery, welding and spray-painting. Wear and tear and overheating of machinery are potential fire hazards. There may be fuel tanks on premises.

Hazards may include woodworking, sheet metal work, casting, heat-treating, electroplating, and plastic, fiberglass work, and upholstery operations. In the absence of well maintained dust collection systems, cutting and buffing operations can generate dust which can catch on fire. Welding should be done in a separate area away from combustibles. Spray painting should be conducted in an area with explosion-proof wiring that meets all UL standards.

Poor housekeeping, such as failure to collect and dispose of trash on a regular basis, could contribute significantly to a loss. Unless disposed of properly, greasy, oily rags (such as those used to clean machinery) can cause a fire without a separate ignition source.

Property stored in the open may be subject to loss by wind or hail or a target for vandalism. Appropriate security controls must be taken including lighting and physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department.

Bottlenecks in the assembly process may result in a high concentration of values of partially completed units, affecting both property valuation and business income. There may be a substantial exposure to loss of income resulting from damage to dependent properties such as key suppliers or customers.

Equipment breakdown exposures include malfunctioning production equipment, electrical control panels and other apparatus. These should be properly maintained and records kept in a central location. A lengthy breakdown to production machinery could result in severe loss, both direct and under time element.

Crime exposures are chiefly from employee dishonesty and theft as auto parts can have a high street value. Employees may act alone or in collusion with outsiders in stealing money, raw materials or finished stock. 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. There should be security methods in place to prevent theft.

Inland marine exposures include accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), goods in transit, and valuable papers and records for customers' and suppliers' information. Backup copies of all records should be made and stored off premises.

There may be contractors' equipment such as forklifts, or an installation exposure if the manufacturer offers installation service. Stock in transit may be susceptible to damage from collision, overturn, fire and theft.

Commercial auto exposure is high if the manufacturer picks up raw materials or components or delivers finished goods to customers. Deadlines placed on drivers (such as "just in time" service to customers) increases the hazard.

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.

What Does Auto Parts Manufacturers Insurance Cover & Pay For?

Auto Parts Manufacturers Insurance Claim Form

Auto parts manufacturers may face various forms of litigation for a variety of reasons. Here are some examples, along with ways that insurance can help mitigate these risks:

Product Liability: If an auto part is defective and causes an accident, injury, or damage, the manufacturer could be held liable. This is one of the most common reasons auto parts manufacturers are sued.
Insurance: Product liability insurance can cover the costs associated with such claims. This may include the legal fees to defend against the claim, as well as any settlements or judgments that are awarded. The insurance could also cover the cost of a product recall if it's determined to be necessary.

Breach of Warranty: Auto parts manufacturers often provide warranties on their products. If a part fails within the warranty period, and the manufacturer refuses to honor the warranty, they could be sued.
Insurance: Commercial general liability (CGL) insurance policies often include coverage for claims related to warranty breaches. These policies would cover the legal costs and any potential damages awarded.

Intellectual Property Infringement: If an auto parts manufacturer is accused of infringing on another company's patents, trademarks, or copyrights, they could face legal action.
Insurance: Intellectual property insurance can protect businesses against these types of claims. This coverage could pay for the legal defense and any awarded damages if the manufacturer is found guilty of infringement.

Workplace Accidents: If an employee is injured while working, they may file a lawsuit against the company, particularly if the injury was due to negligence or unsafe working conditions.
Insurance: Workers' compensation insurance is designed to cover costs related to employee injuries. In most cases, when a company provides this insurance, employees give up their right to sue the company for negligence in return for guaranteed compensation for work-related injuries.

Environmental Damage: Manufacturers, including those in the auto parts industry, can cause environmental damage through their operations, leading to potential lawsuits.
Insurance: Environmental liability insurance can cover costs associated with cleanup efforts, legal fees, and damages related to pollution caused by a company's operations.

Remember, the specifics of what each type of insurance covers can vary based on the individual policy and the insurer, so it's important for companies to thoroughly understand their policies. Additionally, while insurance can help mitigate the financial impact of these risks, it doesn't eliminate the need for manufacturers to prioritize safety, quality, and legal compliance in their operations.

Commercial Insurance And Business Industry Classification


Description for 3714: Motor Vehicle Parts And Accessories

Division D: Manufacturing | Major Group 37: Transportation Equipment | Industry Group 371: Motor Vehicles And Motor Vehicle Equipment

3714 Motor Vehicle Parts And Accessories: Establishments primarily engaged in manufacturing motor vehicle parts and accessories, but not engaged in manufacturing complete motor vehicles or passenger car bodies. Establishments primarily engaged in manufacturing or assembling complete automobiles and trucks are classified in Industry 3711; those manufacturing tires and tubes are classified in Industry 3011; those manufacturing automobile glass are classified in Major Group 32; those manufacturing automobile stampings are classified in Industry 3465; those manufacturing vehicular lighting equipment are classified in Industry 3647; those manufacturing ignition systems are classified in Industry 3694; those manufacturing storage batteries are classified in Industry 3691; and those manufacturing carburetors, pistons, piston rings, and engine intake and exhaust valves are classified in Industry 3592.

  • Air brakes, motor vehicle
  • Automotive wiring harness sets, except ignition
  • Axle housings and shafts, motor vehicle
  • Axles, motor vehicle
  • Ball joints, motor vehicle
  • Bearings, motor vehicle: except ball and roller
  • Brake drums
  • Brakes and brake parts, motor vehicle
  • Bumpers and bumperettes, motor vehicle
  • Camshafts, motor vehicle gasoline engine
  • Cleaners, air: motor vehicle
  • Connecting rods, motor vehicle: gasoline engine
  • Control equipment, motor vehicle: acceleration mechanisms and
  • Crankshaft assemblies, motor vehicle: gasoline engine
  • Cylinder heads, motor vehicle: gasoline engines
  • Defrosters, motor vehicle
  • Differentials and parts, motor vehicle
  • Directional signals, motor vehicle
  • Drive shafts, motor vehicle
  • Dump truck lifting mechanisms
  • Engines and parts, except diesel: motor vehicle
  • Exhaust systems and parts, motor vehicle
  • Fifth wheels
  • Filters: oil, fuel, and air-motor vehicle
  • Frames, motor vehicle
  • Fuel pumps, motor vehicle
  • Fuel systems and parts, motor vehicle
  • Gas tanks, motor vehicle
  • Gears, motor vehicle
  • Governors, motor vehicle
  • Heaters, motor vehicle
  • Hoods, motor vehicle
  • Horns, motor vehicle
  • Hydraulic fluid power pumps for auto motive steering mechanisms
  • Instrument board assemblies, motor vehicle
  • Lubrication systems and parts, motor vehicle
  • Manifolds, motor vehicle: gasoline engine
  • Motor vehicle gasoline engine rebuilding on a factory basis
  • Motor vehicle parts and accessories, except motor vehicle stampings
  • Mufflers, exhaust: motor vehicle
  • Oil filters, motor vehicle
  • Pipes, fuel: motor vehicle
  • Power transmission equipment, motor vehicle
  • Pumps, motor vehicle: oil, water, fuel, and power steering
  • Radiators and radiator shells and cores, motor vehicle
  • Rear axle housings, motor vehicle
  • Rebuilding motor vehicle gasoline engines and transmissions on a
  • Rims, wheel: motor vehicle
  • Sanders, motor vehicle safety
  • Shock absorbers, motor vehicle
  • Steering mechanisms, motor vehicle
  • Thermostats, motor vehicle
  • Third axle attachments or six wheel units for motor vehicles
  • Tie rods, motor vehicle
  • Tire valve cores
  • Tops, motor vehicle: except stamped metal
  • Transmission housings and parts, motor vehicle
  • Transmissions, motor vehicle
  • Universal joints, motor vehicle
  • Vacuum brakes, motor vehicle
  • Wheels, motor vehicle
  • Windshield frames, motor vehicle
  • Windshield wiper systems, all types
  • Winterfronts, motor vehicle
  • Wiring harness sets motor vehicles, except ignition

Description for 3592: Carburetors, Pistons, Piston Rings, And Valves

Division D: Manufacturing | Major Group 35: Industrial And Commercial Machinery And Computer Equipment | Industry Group 359: Miscellaneous Industrial And Commercial

3592 Carburetors, Pistons, Piston Rings, And Valves: Establishments primarily engaged in manufacturing carburetors, pistons, piston rings, and engine intake and exhaust valves. Establishments primarily engaged in manufacturing metallic packing are classified in Industry 3053, and those primarily engaged in manufacturing machine repair and equipment parts (except electric), on a job or order basis for others, are classified in Industry 3599.

  • Carburetors, all types
  • Pistons and piston rings
  • Valves, engine: intake and exhaust

Description for 3647: Vehicular Lighting Equipment

Division D: Manufacturing | Major Group 36: Electronic And Other Electrical Equipment And Components, Except Computer Equipment | Industry Group 364: Electric Lighting And Wiring Equipment

3647 Vehicular Lighting Equipment: Establishments primarily engaged in manufacturing vehicular lighting equipment. Establishments primarily engaged in manufacturing sealed-beam lamps are classified in Industry 3641.

  • Aircraft lighting fixtures
  • Automotive lighting fixtures
  • Bicycle lamps
  • Boat and ship lighting fixtures
  • Clearance lamps and reflectors, motor vehicle
  • Dome lights, motor vehicle
  • Flasher lights, automobile
  • Fog lights, motor vehicle
  • Headlights (fixtures), vehicular
  • Lamps, marker and clearance: motor vehicle
  • Lighting fixtures, vehicular
  • Locomotive and railroad car lights
  • Marker lamps, motor vehicle
  • Motorcycle lamps
  • Parking lights, automotive
  • Reflectors, clearance: vehicular
  • Spotlights, motor vehicle
  • Tail lights, motor vehicle

Description for 3694: Electrical Equipment For Internal Combustion Engines

Division D: Manufacturing | Major Group 36: Electronic And Other Electrical Equipment And Components, Except Computer Equipment | Industry Group 369: Miscellaneous Electrical Machinery, Equipment, and Supplies

3694 Electrical Equipment For Internal Combustion Engines: Establishments primarily engaged in manufacturing electrical equipment for internal combustion engines. Important products of this industry include armatures, starting motors, alternators, and generators for automobiles and aircraft; and ignition apparatus for internal combustion engines, including spark plugs, magnetos, coils, and distributors.

  • Alternators, motor vehicle
  • Armatures, motor vehicle
  • Battery cable wiring sets for internal combustion engines
  • Battery charging generators for internal combustion engines
  • Breaker point sets, internal combustion engine
  • Coils, ignition: internal combustion engines
  • Distributors, motor vehicle engine
  • Generators, aircraft and motor vehicle
  • Harness wiring sets for internal combustion engines
  • Ignition cable sets or wire assemblies for internal combustion engines
  • Ignition systems, high frequency
  • Motors, starting: motor vehicle and aircraft
  • Regulators, voltage: motor vehicle
  • Spark plugs for internal combustion engines
  • Voltage regulators, motor vehicle

Description for 3465: Automotive Stampings

Division D: Manufacturing | Major Group 34: Fabricated Metal Products, Except Machinery And Transportation Equipment | Industry Group 346: Metal Forgings And Stampings

3465 Automotive Stampings: Establishments primarily engaged in manufacturing automotive stampings, such as body parts, hubs, and trim.

  • Automotive stampings: e.g., fenders, tops, hub caps, body parts, trim
  • Body parts, automotive: stamped
  • Moldings and trim, automotive: stamped

Description for 3585: Air-Conditioning and Warm Air Heating Equipment and Commercial And Industrial Refrigeration Equipment

Division D: Manufacturing | Major Group 35: Industrial And Commercial Machinery And Computer Equipment | Industry Group 358: Refrigeration And Service Industry Machinery

3585 Air-Conditioning and Warm Air Heating Equipment and Commercial And Industrial Refrigeration Equipment: Establishments primarily engaged in manufacturing refrigeration equipment and systems and similar equipment for commercial and industrial use; complete air-conditioning units for domestic, commercial, and industrial use; and warm air furnaces. Establishments primarily engaged in manufacturing soda fountains and beer dispensing equipment and humidifiers and dehumidifiers, except portable, are also classified in this industry. Establishments primarily engaged in manufacturing household refrigerators and home and farm freezers are classified in Industry 3632, and those manufacturing electric air-space heaters and portable humidifiers and dehumidifiers are classified in Industry 3634.

  • Air-conditioners, motor vehicle
  • Air-conditioning and heating combination units
  • Air-conditioning compressors
  • Air-conditioning condensers and condensing units
  • Air-conditioning units complete: domestic and industrial
  • Beer dispensing equipment
  • Cabinets, show and display: refrigerated
  • Cases, show and display: refrigerated
  • Cold drink dispensing equipment, except coin-operated
  • Compressors for refrigeration and air-conditioning
  • Condensers and condensing units: refrigeration and air-conditioning
  • Coolers, milk and water: electric
  • Counters and counter display cases, refrigerated
  • Dehumidifiers, except portable: electric
  • Electric warm air furnaces
  • Evaporative condensers (heat transfer equipment)
  • Fountains, drinking mechanically refrigerated
  • Furnaces: gravity air flow
  • Heat pumps, electric
  • Humidifying equipment, except portable
  • Ice boxes, industrial
  • Ice making machinery
  • Lockers, refrigerated
  • Refrigeration compressors
  • Refrigeration machinery and equipment, industrial
  • Room coolers, portable
  • Showcases, refrigerated
  • Siphons, soda water
  • Snow making machinery
  • Soda fountains, parts, and accessories
  • Tanks, soda water

Auto Parts Manufacturers Insurance - The Bottom Line

Not all auto parts manufacturers insurance polices have the same limits, exclusions and coverage. To determine that your auto parts company has all its insurance needs covered in a comprehensive plan, speak with a reputable commercial insurance agent.

In many cases they can save you premium dollars and offer you better policy options than you currently have.

Additional Resources For Manufacturing Insurance

Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.


Manufacturing Insurance

The manufacturing industry is a vital part of the economy and plays a significant role in the production of goods and services. However, it is also an industry that is prone to risks and accidents, which can result in costly damages and lawsuits. Therefore, it is essential for businesses in the manufacturing industry to have insurance to protect them against potential losses.

Business insurance can cover a wide range of risks, including property damage, liability, and worker injuries. For instance, if a fire were to break out in a manufacturing facility and destroy equipment or inventory, commercial insurance could cover the costs of replacing or repairing the damages. Similarly, if a worker were to be injured on the job, business insurance could cover medical expenses and lost wages.

In addition to protecting against physical damages, insurance can also provide financial protection against legal liabilities. If a customer were to sue a manufacturing business for a faulty product, the commercial insurance could cover the costs of legal fees and settlements.

Overall, insurance is essential for the manufacturing industry as it helps to mitigate risks and protect against unexpected costs. Without it, businesses in the industry could face financial ruin in the event of an accident or lawsuit.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, 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.


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