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:
- What Is Commercial Air Conditioning Manufacturers Insurance?
- 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?
- What Does Commercial Air Conditioning Manufacturers Insurance Cover & Pay For?
What Is Commercial Air Conditioning Manufacturers Insurance?
Commercial air conditioning manufacturers insurance is a type of insurance coverage that is specifically designed for companies that manufacture and sell air conditioning systems and related products. This type of insurance protects the manufacturer from financial losses that may occur due to product liability claims, property damage, theft, and other risks associated with the manufacturing and distribution of air conditioning systems.
The policy typically covers legal fees, medical expenses, and repair costs that may result from product defects or other issues. The insurance also provides protection against lawsuits that may arise from injury or property damage caused by the manufacturer's products.
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.
What Does Commercial Air Conditioning Manufacturers Insurance Cover & Pay For?
Commercial air conditioning manufacturers can face various legal risks that may lead to lawsuits. Here are some common reasons they may be sued, along with how insurance can help cover these risks:
1. Product Liability: If an air conditioning unit is found to have a manufacturing defect, faulty design, or insufficient instructions and warnings that cause harm to a customer, a product liability lawsuit can be filed against the manufacturer. Product liability insurance can help in such situations. This type of insurance protects businesses from financial loss due to a defective product that causes injury or bodily harm. It covers legal fees, settlements, and any required medical payments.
2. Property Damage: If a faulty air conditioning unit results in property damage (like a fire or water damage), the manufacturer can be held liable. Commercial general liability (CGL) insurance often provides coverage for bodily injury and property damage that your business causes to others. This can include legal defense costs and any resulting judgment or settlement.
3. Workers' Compensation Claims: If an employee gets injured while manufacturing air conditioning units, they may sue the company for compensation. Workers' compensation insurance is designed to cover medical costs, lost wages, and other expenses associated with workplace injuries. It also provides employer's liability coverage, which can help pay for defense costs if the employee decides to sue.
4. Intellectual Property Infringement: If a manufacturer is accused of infringing on another company's patent or design, they may be sued. Intellectual property insurance can help cover the legal costs associated with defending against these claims and any resulting judgments or settlements.
5. Contract Disputes: Manufacturers often have contracts with suppliers, customers, or other businesses. If a dispute arises over the terms of a contract, they could be taken to court. Commercial legal expense insurance can cover the costs of legal representation in such cases, as well as any compensation or settlement that might be required.
Insurance provides a financial shield to manufacturers by taking care of the legal expenses, compensations, and settlements in case of a lawsuit. It's worth noting that the exact coverage depends on the specific policy and insurer, so manufacturers should carefully review their policies to ensure they have adequate coverage for their risks.
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 Workers Compensation Code(s): 3179 Electrical Apparatus Manufacturing NOC
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.
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
- Industrial Equipment
- Iron & Steel Foundries
- Lawn Mowers
- Leather Apparel
- Leather Goods
- 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
- Vegetable Juice
- Vending Machines
- Wire Rope
- Wood Furniture
- Writing Instruments
- Specialty Manufacturing
- Specialty Product Liability
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.