Clothing Manufacturers Insurance Policy Information
Clothing Manufacturers Insurance. The clothing industry, which plays a crucial part in the global economy, comprises companies involved in all stages of the manufacture of garments — from textile production to the manufacture of buttons. Clothing manufacturers, who play a direct part in the manufacture of apparel, can offer a range of services.
Clothing manufacturers produce a wide range of apparel items for men, women, infants and children. Clothing may be produced from natural or synthetic fibers. Natural fibers come from animal, plant, and insect sources, and include cotton, hair, linen, silk and wool.
Common synthetic fibers include acrylic and nylon. Natural and synthetic fibers are commonly blended to produce desired qualities such as absorbency, comfort, durability, or water resistance.
The process consists of designing the item, developing patterns, cutting the individual pieces, sewing the parts together, applying trims or clasps, applying finishing, and then packaging for shipment. Although some automation may be possible in the cutting process, sewing of individual items is a labor-intensive process.
Because of the varieties of materials and processes involved in production, the different phases of manufacture may be carried out in different locations or different countries.
They may be full-package clothing manufacturers responsible for the entire process, from pattern-making to procuring textiles, and from cutting to sewing. Clothing manufacturers may also work to client specifications, with materials provided by the customer. In some cases, a clothing manufacturer may work "piecemeal", handling only a very specific part of the manufacturing process for numerous clients at a time.
These specialized companies may be cutting houses, sewing houses, or embroiders, for example. Some clothing manufacturers engage in large-scale operations, while others are small, family-run, companies.
As diverse as manufacturing within the clothing industry is, the one thing common to them all is this — they all need to carry clothing manufacturers insurance, because they all face the possibility of unforeseen circumstances. What type of insurance do clothing manufacturers need to carry, and why? This quick guide will get you started.
Clothing 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 clothing manufacturing insurance questions:
- How Much Does Clothing Manufacturers Insurance Cost?
- Why Do Clothing Manufacturers Need Insurance?
- What Type Of Insurance Do Clothing Manufacturers Need?
How Much Does Clothing Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small clothing manufacturing businesses ranges from $57 to $89 per month based on location, size, revenue, claims history and more.
Why Do Clothing Manufacturers Need Insurance?
Regardless of its size or the aspect of clothing production a clothing manufacturer handles, your company will be vulnerable to a myriad of risks. Some of those risks are shared by all companies, regardless of their field. They would include acts of nature — earthquakes, wildfires, and hurricanes, for example — as well as theft and vandalism.
Other hazards will be specific to your own industry. A worker may be injured while sewing, for instance, and the fact that you are working with textiles can increase your risk of fire. Third-party lawsuits are another very real prospect clothing manufacturers could face.
All of these possibilities illustrate why it is vital to have the right clothing manufacturers insurance. Clothing manufacturing firms that are incorrectly insured or under-insured risks being liable for costs that could potentially deal a fatal blow to their growing businesses.
What Type Of Insurance Do Clothing Manufacturers Need?
The sheer variety of available clothing manufacturers insurance policies can be confusing and difficult to navigate for any clothing manufacturer. Nonetheless, the success of your business depends, in part, on having the right insurance coverage.
Because your precise insurance needs may differ from those of other companies, even within the same industry, it is crucial to build a relationship of trust with a seasoned commercial insurance agent. Very often, it is best to get all your coverage from the same insurance company.
Your commercial insurance agent will deeply familiarize themselves with the size of your business, the location and nature of your manufacturing facilities, the number of employees, and the exact nature of your activities, among other things. From there, they can recommend clothing manufacturers insurance coverage that truly suits your needs. This will nearly always include:
- Commercial Property: This essential type of insurance serves to protect your property from a range of risks, including acts of nature, theft, and damage that can strike any business. It also, however, covers the contents of the property, including equipment and inventory.
- Commercial General Liability: Clothing manufacturers also need to make sure that they obtain the right commercial general liability insurance. It is there to protect you in the event of third-party damage and personal injury, and will (partially) cover your company's legal fees and settlement costs.
- Equipment Breakdown: As a clothing manufacturer, you are likely to use valuable equipment in your manufacturing process. Should any of your equipment become damaged or be subject to catastrophic breakdown and need to be replaced, equipment breakdown insurance will have you covered.
- Workers' Compensation: Legally required in many jurisdictions, workers' compensation insurance serves to protect your employees, but also your company. Workplace accidents pose a realistic risk in the clothing industry, but this type of insurance covers injuries resulting from, for instance, falls or even repetitive stress injury, as well as situations like worker entanglement in equipment. Workers comp covers medical expenses, lost wages for workers who cannot return to their duties, and even death benefits.
It is important to realize that clothing manufacturers insurance coverages can vary. You may require additional kinds of insurance, such as product liability insurance that covers damage caused by the use of your products, or business interruption insurance that guards against loss of income in case your company needs to halt production for a time, as well. Your commercial insurance agent is your trusted partner in making sure that all your needs are met.
Clothing Manufacturing's Risks & Exposures
Premises liability exposure is normally low due to limited access by visitors. If the manufacturer has a showroom or offers tours, visitors may be injured by slips, trips, or falls. Chemicals used in the coating and finishing may be corrosive and/or toxic. Fumes, spills or leaks may cause serious injury or property damage to neighboring premises.
Products liability exposure is normally light unless infants', children's wear or sleepwear is manufactured or if there are other special conditioning or fabric treatment processes. Infants' and children's clothing must meet all federal flammability guidelines.
Environmental impairment exposure is light unless the manufacturer performs any fabric dyeing or chemical treating. Fumes and improper disposal of scrap can result in air, ground, or water contamination. Disposal procedures must adhere to all EPA and other regulatory standards.
Workers compensation exposures can be moderate to high. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, and back injuries from lifting. 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. Flammable liquids and chemicals used to treat fabrics can cause skin irritation, eye irritation and possible long-term occupational disease. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair. Repetitive motion injuries can result from ongoing use of machinery. Workstations should be ergonomically designed.
Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations. A large amount of the piece work may be done by individuals whose status (employee or independent contractor) must be clear. Production incentives can be a disincentive to safety if the only consideration is by piece production.
Property exposures consist of an office, production plant, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, and production machinery. Chemicals used in fabric dyeing or coating are often flammable and should be properly labeled, separated, and stored in approved containers. Dust from textile processing operations can explode if ignited.
This hazard increases in the absence of well-maintained dust collection systems attached to the knitting and cutting stations. Fabrics (raw materials, supplies, scrap and finished goods) and foam fillers are often highly combustible, especially if poorly stored without adequate aisle space and shelving. Fabric is susceptible to damage by fire or smoke, water and moisture, or temperature.
Minor fires may result in major inventory losses. Poor housekeeping, such as failure to collect and dispose of scraps 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.
Appropriate security controls must be taken including 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.
Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained and records kept in a central location.
Crime exposure comes from employee dishonesty and theft. 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), exhibitions, 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. Goods in transit may be damaged by fire, collision, overturn, and theft or water damage.
Business auto exposure may be high if the manufacturer transports raw materials or finished products. 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.
Commercial Insurance And Business Industry Classification
- SIC CODE: 2300 Apparel and Other Finishd Prods Of Fabrics and Similar Matl, 2311 Men's and Boys' Suits, Coats, and Overcoats, 2320 Men's and Boys' Furnishgs, Work Clothg, & Allied Garments, 2321 Men's and Boys' Cut and Sew Apparel Manufacturing, 2322 Men's and Boys' Underwear and Nightwear, 2323 Apparel Accessories and Other Apparel Manufacturing, 2325 Men's and Boys' Separate Trousers and Slacks, 2326 Men's and Boys' Cut and Sew Apparel Manufacturing, 2329 Men's and Boys' Cut and Sew Apparel Manufacturing, 2330 Women's, Misses', and Juniors Outerwear, 2331 Women's, 2335 Women's, Misses', and Juniors' Dresses, 2337 Women's, Misses', and Juniors' Suits, Skirts, and Coats, 2339 Women's, Misses', and Juniors' Outerwear, Not Elsewhere Classified, 2340 Women's, Misses', Children's and Infants' Undergarments, 2341 Women's, Misses', Children's, and Infants' Underwear and Nightwear, 2342 Brassieres, Girdles, and Allied Garments, 2353 Apparel Accessories and Other Apparel Manufacturing, 2361 Girls', Children's, and Infants' Dresses, Blouses, and Shirts, 2369 Girls', Children's, and Infants' Outerwear, Not Elsewhere Classified, 2371 Other Cut and Sew Apparel Manufacturing, 2381 Apparel Accessories and Other Apparel Manufacturing, 2384 Robes and Dressing Gowns, 2385 Waterproof Outerwear, 2386 Leather and Sheep - Lined Clothing, 2387 Apparel Belts, 2389 Other Cut and Sew Apparel Manufacturing, 2390 Miscellaneous Fabricated Textile Products, 2391 Curtain and Linen Mills, 2392 Curtain and Linen Mills, 2393 Textile Bag and Canvas Mills, 2394 Textile Bag and Canvas Mills, 2395 Pleating, Decorative and Novelty Stitching, and Tucking For The Trade, 2396 Apparel Accessories and Other Apparel Manufacturing, 2397 Narrow Fabric Mills and Schiffli Machine Embroidery, 2399 All Other Misc. Textile Product Mills
- NAICS CODE: 315110 Hosiery and Sock Mills, 315190 Other Apparel Knitting Mills, 315210 Cut and Sew Apparel Contractors, 315220 Men's and Boys' Cut and Sew Apparel Manufacturing, 315240 Women's, Girls', and Infants' Cut and Sew Apparel Manufacturing, 315280 Other Cut and Sew Apparel Manufacturing, 315990 Apparel Accessories and Other Apparel Manufacturing
- Suggested ISO General Liability Code(s): 51896 Clothing Manufacturing
- Suggested Workers Compensation Code(s): 2501 Umbrella Manufacturing, 2362 Knit Goods Manufacturing NOC, 2388 Embroidery Manufacturing
Description for Major Group 23: Apparel And Other Finished Products Made From Fabrics And Similar Materials
OSHA says, "This major group, known as the cutting-up and needle trades, includes establishments producing clothing and fabricating products by cutting and sewing purchased woven or knit textile fabrics and related materials, such as leather, rubberized fabrics, plastics, and furs.
Also included are establishments that manufacture clothing by cutting and joining (for example, by adhesives) materials such as paper and non-woven textiles. Included in the apparel industries are three types of establishments:
- The regular or inside factories
- Contract factories
- Apparel jobbers
The regular factories perform all of the usual manufacturing functions within their own plant; the contract factories manufacture apparel from materials owned by others; and apparel jobbers perform the entrepreneurial functions of a manufacturing company, such as buying raw materials, designing and preparing samples, arranging for the manufacture of clothing from their materials, and selling of the finished apparel.
Knitting mills are classified in Industry 2253 if primarily knitting outerwear, and in Industry 2254 if primarily knitting underwear and nightwear. Custom tailors and dressmakers not operating on a factory basis are classified in Retail Trade, Industry 5699; and establishments which purchase and resell finished garments but do not perform the functions of the, apparel jobbers are classified in Wholesale Trade, Industry Group 513."
Industry Group 231: Men's And Boys' Suits, Coats, And Overcoats
- 2311 Men's and Boys' Suits, Coats, and Overcoats
Industry Group 232: Men's And Boys' Furnishings, Work Clothing, And Allied Garments
- 2321 Men's and Boys' Shirts, Except Work Shirts
- 2322 Men's and Boys' Underwear and Nightwear
- 2323 Men's and Boys' Neckwear
- 2325 Men's and Boys' Separate Trousers and Slacks
- 2326 Men's and Boys' Work Clothing
- 2329 Men's and Boys' Clothing, Not Elsewhere Classified
Industry Group 233: Women's, Misses', And Juniors' Outerwear
- 2331 Women's, Misses', and Juniors' Blouses and Shirts
- 2335 Women's, Misses', and Juniors' Dresses
- 2337 Women's, Misses', and Juniors' Suits, Skirts, and Coats
- 2339 Women's, Misses', and Juniors' Outerwear, Not Elsewhere Classified
Industry Group 234: Women's, Misses', Children's, And Infants'
- 2341 Women's, Misses', Children's, and Infants' Underwear and Nightwear
- 2342 Brassieres, Girdles, and Allied Garments
Industry Group 235: Hats, Caps, And Millinery
- 2353 Hats, Caps, and Millinery
Industry Group 236: Girls', Children's, And Infants' Outerwear
- 2361 Girls', Children's, and Infants' Dresses, Blouses, and Shirts
- 2369 Girls', Children's, and Infants' Outerwear, Not Elsewhere Classified
Industry Group 238: Miscellaneous Apparel And Accessories
- 2381 Dress and Work Gloves, Except Knit and All-Leather
- 2384 Robes and Dressing Gowns
- 2385 Waterproof Outerwear
- 2386 Leather and Sheep-Lined Clothing
- 2387 Apparel belts
- 2389 Apparel and Accessories, Not Elsewhere Classified
Industry Group 239: Miscellaneous Fabricated Textile Products
- 2391 Curtains and Draperies
- 2392 House furnishing, Except Curtains and Draperies
- 2393 Textile Bags
- 2394 Canvas and Related Products
- 2395 Pleating, Decorative and Novelty Stitching, and Tucking for the Trade
- 2396 Automotive Trimmings, Apparel Findings, and Related Products
- 2397 Schiffli Machine Embroideries
- 2399 Fabricated Textile Products, Not Elsewhere Classified
Description for 315 - Apparel Manufacturing
The NAICS says, "Industries in the Apparel Manufacturing subsector group establishments with two distinct manufacturing processes:
- Cut and sew (i.e., purchasing fabric and cutting and sewing to make a garment)
- The manufacture of garments in establishments that first knit fabric and then cut and sew the fabric into a garment.
The Apparel Manufacturing subsector includes a diverse range of establishments manufacturing full lines of ready-to-wear apparel and custom apparel: apparel contractors, performing cutting or sewing operations on materials owned by others; jobbers, performing entrepreneurial functions involved in apparel manufacturing; and tailors, manufacturing custom garments for individual clients.
Knitting fabric, when done alone, is classified in the Textile Mills subsector, but when knitting is combined with the production of complete garments, the activity is classified in the Apparel Manufacturing subsector."
3151: Apparel Knitting Mills
- 315110: Hosiery and Sock Mills
- 315190: Other Apparel Knitting Mills
3152: Cut and Sew Apparel Manufacturing
- 315210: Cut and Sew Apparel Contractors
- 315220: Men's and Boys' Cut and Sew Apparel Manufacturing
- 315240: Women's, Girls', and Infants' Cut and Sew Apparel Manufacturing
- 315280: Other Cut and Sew Apparel Manufacturing
3159: Apparel Accessories and Other Apparel Manufacturing
- 315990: Apparel Accessories and Other Apparel Manufacturing
Clothing Manufacturers Insurance - The Bottom Line
All clothing manufacturers insurance polices are not the same - there are different policies, exclusions and coverages available. To find out if your company has the best fit insurance program, speak with an experienced commercial insurance agent.
Often they are able to save you on premiums and offer you better policy options than you currently have.
Types Of Small Business Insurance - Requirements & Regulations
Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.
Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.
Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.
Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.
Small Business Insurance Information
In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.
The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.
Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.
According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.
Types Of Small Business Insurance
Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:
- What type of business am I running?
- What are common risks associated with this industry?
- Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
- Does my state require me to carry this type of insurance?
- Does my lender or do any of my investors require me to carry this type of policy?
A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:
|Business Insurance Policy Type||What Is Covered?|
|General Liability Insurance||What is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.|
|Workers Compensation Insurance||What is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.|
|Product Liability Insurance||What is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.|
|Commercial Property Insurance||What is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.|
|Business Owners Policy (BOP)||What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.|
|Commercial Auto Insurance||What is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.|
|Commercial Umbrella Policies||What is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.|
|Liquor Liability Insurance||What is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.|
|Professional Liability (Errors & Omissions)||What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.|
|Surety Bond||What is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).|
Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.
Business Insurance Required by Law
If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.
Your insurance agent can help you check applicable state laws so you can bring your business into compliance.
Other Types Of Small Business Insurance
There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:
- Business Interruption Insurance
- Commercial Flood Insurance
- Contractor's Insurance
- Cyber Liability
- Data Breach
- Directors and Officers
- Employment Practices Liability
- Environmental or Pollution Liability
- Management Liability
- Sexual Misconduct Liability
Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.
Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.
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.
- 3D Printing
- Audio & Video Equipment
- Auto Parts
- Bottling Plants
- Brooms & Brushes
- Camping Equipment
- Canned Fruit & Vegetables
- Canvas Products
- CBD Oil And Hemp
- Clock & Watch
- Commercial Air Conditioning
- Commercial Electronics
- Communications Equipment
- Construction Equipment
- Cork Products
- Dairies & Creameries
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Flavoring Extracts
- Frozen Foods
- Fruit Juice
- Fur Garment
- Garage Door
- Gypsum Products
- Ice Cream
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Lighting & Wiring
- Lumber & Wood Products
- Machine Shop
- Major Electrical Appliances
- Marijuana Products
- Mattresses & Box Springs
- Metal & Plastic Furniture
- Metal Heat Treating
- Metal Toys
- Musical Instruments
- Nonferrous Foundries
- Ornamental Metalwork
- Paper & Allied Products
- Pet Food
- Plastic & Rubber Toys
- Plastic Goods
- Plastics Molding, Forming & Extruding
- Product Liability
- Psychedelic Drugs
- Pulp & Paper Mills
- Residential Air Conditioning & Heating
- Rubber Goods
- Sawmills & Planing Mills
- Screw Machine Products
- Sheet Metal
- Soap & Detergent
- Small Electrical Appliances
- Sporting Goods
- Stone Products
- Textiles Finishing & Coating
- Tool & Die Shops
- Vending Machines
- Vegetable Juice
- Wire Rope
- Wood Furniture
- Writing Instruments
For manufacturers, 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.
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, 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.