Commercial Air Conditioning Manufacturers Insurance Policy Information
Commercial Air Conditioning Manufacturers Insurance. Most commercial ventures make use of air conditioning. Restaurants, stores, and office buildings, rely on air conditioning to ensure the personal comfort of their workers and customers. For industry, even more may be at stake - the safety and success of their manufacturing process could easily depend on constant temperature and humidity ranges.
Commercial air conditioning manufacturers produce cooling systems for use in hospitals and other institutions, offices, retail stores, warehouses, and other non-residential establishments. The product's casing, housing, or cabinet can be constructed of plastic, wood or metal.
The interior contains machinery and the electrical wiring or electronic circuitry. Other parts may be of metal, glass, rubber, or plastic. The different phases of manufacture may be carried out in different locations or different countries.
Separate divisions or independent firms (subcontractors) may handle a single aspect of the process, such as producing circuit boards, making peripherals and accessories, or filling ("charging") refrigeration coils. Some manufacturers may subcontract the separate operations and simply perform the final assembly.
An air conditioning unit is a closed metal piping system filled with refrigerant, comprised of hot coils ("condenser coils") on the outside of the building to dissipate heat and chilled coils on the inside, called "evaporator coils." The two sets of coils are linked by a compressor and an expansion valve. Air movement is facilitated by fans driven by an electric motor.
The level of cooling is determined by an electronic control unit or thermostat. Since commercial units may be called upon to control the cooling and ventilation of very large public buildings and high-rises, the manufacture of commercial air conditioning units often involves heavy lifting, industrial cranes, and customization to meet customers' specific needs.
Commercial air conditioning manufacturers supply both small and large businesses with the type of air conditioning that meets their unique needs. The main types of air conditioning used for commercial purposes include single split-systems, multi-split systems, and VRF or VRV systems. Typically mounted on walls or ceilings, these units can adequately accommodate most types of companies.
Air conditioners are surprisingly complex, comprised of multiple parts such as compressors, evaporators, thermostats, and fans, and numerous raw materials - like copper, steel, cast iron, plastic, fiber glass, aluminum, and rubber - go into their manufacture.
While manufacturers will strive to ensure that their production runs smoothly, unforeseen circumstances are always a risk. In some cases, they could result in disastrous financial losses - unless, that is, you have the correct commercial air conditioning manufacturers insurance coverage. Read on to find out what types of business insurance you cannot do without.
Commercial air conditioning manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $87/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked commercial air conditioning manufacturing insurance questions:
- How Much Does Commercial Air Conditioning Manufacturers Insurance Cost?
- Why Do Commercial Air Conditioning Manufacturers Need Insurance?
- What Type Of Insurance Do Commercial Air Conditioning Manufacturers Need?
How Much Does Commercial Air Conditioning Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small commercial air conditioning manufacturing businesses ranges from $87 to $129 per month based on location, size, revenue, claims history and more.
Why Do Commercial Air Conditioning Manufacturers Need Insurance?
Companies that make commercial air conditioners face some of the very same risks any type of business does, and can be held legally responsible for associated costs. Your manufacturing facility could, for example, be damaged or destroyed in an act of nature, such as a fire or a big storm.
Like all companies, your venture could fall victim to theft or vandalism. Some of the worst-case scenarios that could befall your manufacturing business will be unique to the air conditioning industry; a machine crucial to your manufacturing operation could malfunction, necessitating the halt of your work, or a purchaser could attempt to hold you responsible should one of your units interfere with their own business.
It is not difficult to imagine the catastrophic financial consequences that could befall a manufacturer of commercial air conditioning if they were suddenly and solely expected to fund the costs associated with any of these worst-case scenarios.
The right commercial air conditioning manufacturers insurance policies will make sure that you don't have to worry, because you'll know you are protected.
What Type Of Insurance Do Commercial Air Conditioning Manufacturers Need?
The insurance market is a complex one, with numerous types of commercial air conditioning manufacturers insurance policies, each covering a different aspect of the risks you will face.
You will want to thoroughly explore what kinds of insurance you need with a capable commercial insurance agent; your needs are going to depend on the size of your business, its location, your number of employees, and the materials you work with.
Some kinds of commercial air conditioning manufacturers insurance are, however, indispensable. Companies that make air conditioning units for commercial ventures will not be able to do without:
- Commercial Property: A must-have for any type of commercial venture, this type of insurance serves to protect your physical assets should they be damaged or destroyed in acts of nature, vandalism, or theft. Covering buildings as well as physical assets such as machinery and raw materials, it will help cover the costs of repair, replacement, and even lost revenue.
- Commercial General Liability: You will also need to carry commercial general liability insurance, which covers legal expenses and settlement fees in the event a third party sues you for personal injury or property damage.
- Product Liability: This specialized insurance type is designed to protect you from financial loss should any of your air conditioning products have to be recalled, which may result from faulty design, manufacturing errors, or malicious tampering, among other things. It is another type of liability insurance that is invaluable in the manufacturing industry.
- Workers Compensation: This type of insurance, more colloquially known as "workman's comp", protects your company should an employee sustain an injury on the job. It applies to both acute injuries and longer-term health hazards such as repetitive stress injury, and is there to cover a worker's medical bills as well as to replace their lost wages as they recover. Having workers' compensation insurance protects you from lawsuits in these cases, so long as you follow health and safety regulations.
These are just some of the types of commercial air conditioning 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.
Commercial Air Conditioning Manufacturing's Risks & Exposures
Premises liability exposure is normally low due to limited access by visitors. If tours are given or customers come onto the premises, they could be injured by slips, trips, or falls. Visitors should be continually supervised, especially if overhead cranes are present. Fumes and noise may affect neighbors. If the manufacturer installs equipment on customers' premises, there may be a frequency of property damage claims.
Products liability exposure is high to very high depending on the type of industry for which the units are being manufactured. Industries that require sterile environments, such as medical and some specialized manufacturing, must have air conditioning units that assist in maintaining that sterile condition.
If the unit discharges contaminants into a sterile environment, a significant loss will occur due to the need to re-sterilize the room and destroy any product that was there at the time of the contamination.
When an air conditioner malfunctions, the cause may be difficult to determine as it could arise from faulty system design, faulty manufacture, or faulty installation. Quality control, including component standards and product documentation, is important. Products losses for air conditioning manufacturers had been minimal until "sick building" exposures started coming to the attention of the courts.
Manufacturers must now pay greater attention to ventilation system design, and be especially aware of potential places for the accumulation of stagnant air. Older units made before improved safety features were introduced may still be in use.
Environmental impairment liability exposure may be very high due to possible contamination of ground, air, and water from chemicals and toxic lubricants, solvents and paints. For plastics, the raw materials may be toxic and are flammable, the catalysts may be caustic, and the final product is usually not biodegradable.
For metal, contaminants may come from the chemicals, paints, and solvents used. Storage and disposal procedures, particularly for refrigerants, must adhere to all EPA and other regulatory standards.
Workers compensation exposures can be very high. Injuries from production machinery are common, as are minor cuts, puncture wounds, burns, hearing impairment from noise, slips, trips, falls, foreign objects in the eye, back injuries from lifting, and repetitive motion injuries. Drivers of forklifts and vehicles may be injured in accidents or rollovers.
Working with electronics can result in electrocution. Workstations should be ergonomically designed. Exposure to chemicals could result in skin and eye irritations, as well as respiratory problems. Because overhead cranes and portable cranes and forklifts can pose significant hazards, training is very important and special safety equipment may be needed in certain areas of the plant.
Employees must be fully informed as to the potential effects of the chemicals, including long-term occupational disease hazards so that they can be aware of warning symptoms and obtain treatment as early as possible.
Property exposures consist of offices, plant, and warehouse or yard for storage of components and finished goods. Ignition sources include heating and cooling equipment, production machinery, electrical panels, welding, electrical work, spray painting, and the build-up of dust from the cutting and sanding that can cause fire and explosion. The risk increases in the absence of proper dust collection systems, ventilation, and adequate disposal procedures.
Paints, lubricants, degreasers, and solvents can be flammable and must be adequately separated and stored away from other operations. Plastic work may include molding or extrusion. Welding and soldering must be done away from combustibles and flammable liquids. Metal housing may require soldering, electroplating, or annealing. The metal may be painted by spray or in dip tanks.
Spray painting operations can cause a fire unless carried out in spray booths with explosion-proof electrical components. Testing may produce arcing. Chemicals used in the process may cause noxious fumes and corrosion. Without a sterile environment, circuitry may be contaminated by dust or damaged by static.
While refrigerants are generally not flammable, the electrical and computer component parts may be highly sensitive to smoke, water, and heat damage. A very small fire can cause total damage if there is not adequate separation of the storage from the possible ignition sources.
Air conditioning and heating systems and their components may be targets for theft. Appropriate security controls should 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 breakdown losses to the building services systems, malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. Breakdown and loss of use to the conveyor and other production machinery could result in not only a significant direct loss but also a significant time element loss.
Crime exposure comes from employee dishonesty and theft of circuitry or precious metal plating. 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. The manufacturer should have security methods in place to prevent theft.
Inland marine exposures arise from accounts receivable if the manufacturer offers credit, computers (which may include computer-run production equipment), contractors' equipment (forklifts), exhibitions, goods in transit, and valuable papers and records for customers' and suppliers' information. If the manufacturer installs the units they produce, an installation floater is needed.
In commercial work, air conditioning units are large and bulky and are often lifted by crane to rooftops for installation or retrofit. Units being installed may be dropped or fall from heights. Since any accident may trigger loss under both the installation coverage and also third-party liability, this work is often done by an independent contractor who provides both crane and a licensed operator. Other causes of loss include breakage, fire, theft, collision, overturn, and water damage.
Commercial auto exposure may be high if the manufacturer picks up raw materials or delivers finished goods to customers. Commercial air-conditioning and heating units can be large and very heavy. Proper loading and tie-down procedures are essential to prevent overturn.
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: 3585 Air-Conditioning And Warm Air Heating Equipment And Commercial and Industrial Refrigeration Equipment
- NAICS CODE: 333415 Air Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing
- Suggested ISO General Liability Code(s): 51116
- Suggested Workers Compensation Code(s): 3179
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
Commercial Air Conditioning Manufacturers Insurance - The Bottom Line
Commercial air conditioning manufacturers insurance polices vary widely in cost, coverage and exclusions. To see if your company has the best fit insurance policies, speak with an experienced commercial insurance broker.
Often they are able to save you on cost 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.
- Audio & Video Equipment
- Auto Parts
- 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
- Down And Feather Products
- Dry Ice
- Dyes & Pigments
- Electronic Toys & Games
- Exercise Equipment
- Farm Equipment
- Feed & Grain
- Fur Garment
- Garage Door
- Gypsum Products
- 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
- 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
- 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.