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Construction Equipment Manufacturers Insurance Policy Information

Construction Equipment Manufacturers Insurance

Construction Equipment Manufacturers Insurance. Construction equipment, as a term, typically refers to earth-moving heavy equipment, and includes a range of essential machines such as excavators, bulldozers, motor grazers, trenchers, and dump trucks.

Construction machinery and equipment manufacturers produce large items such as bulldozers, excavators, and cranes used in building roads, clearing land, digging foundations, or lifting heavy objects.

The process consists of product design, developing patterns or molds for component parts, making or subcontracting the various parts, assembling the final product, finishing, testing and quality control, and delivery to the customer.

Operations include metal casting, electroplating, heat treating, and sheet metal stamping, fabricating exposures from welding to grinding to spray-painting, plastic extrusion or molding, and fabric upholstery work.

Because of the varieties of materials and processes involved, the different phases of manufacture may be carried out in different locations, or different countries.

These heavy-duty machines are vital to construction and demolition projects of almost any size, from the construction of a single residential home to large-scale projects in which entire neighborhoods are erected.

While industry giants hold a large share of the construction equipment market, smaller ventures can be successful in this industry as well. They may manufacture components or assemble construction equipment with components made by other companies.

As a manufacturer of construction equipment, there is little doubt that your field carries a tremendous amount of responsibility. Well-built heavy vehicles used in construction and demolition may last a lifetime, but your company itself faces a range of serious risks.

Investing in the best insurance coverage is essential to protect the financial health of a company in this field. What forms of construction equipment manufacturers insurance should companies in this industry be aware of? Discover more by reading this brief guide.

Construction equipment 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 construction equipment manufacturing insurance questions:

What Is Construction Equipment Manufacturers Insurance?

Construction equipment manufacturers insurance is a type of insurance designed to protect construction equipment manufacturers from financial losses due to various risks such as accidents, theft, liability, and property damage.

This insurance provides coverage for damages to property, physical injury, and other losses incurred during the production, storage, and transportation of construction equipment. It may also provide coverage for products liability and errors and omissions that may arise from the design and manufacture of construction equipment.

The purpose of construction equipment manufacturers insurance is to protect the financial stability of the company in the event of a loss, allowing the manufacturer to continue its operations without interruption.

How Much Does Construction Equipment Manufacturers Insurance Cost?

The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small construction equipment manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.

Why Do Construction Equipment Manufacturers Need Insurance?

Insurance For Manufacturers

Manufacturers of construction equipment require insurance for two distinct reasons - to meet the legal requirements within their jurisdiction, but also because the appropriate insurance coverage can make the difference between devastating financial losses and continued financial success.

The perils that threaten manufacturers of construction equipment are many. Some are almost universal, applying to companies in all fields, while others are more unique to your own industry. Acts of nature, such as wildfires, earthquakes, and floods, could demolish your manufacturing facility almost overnight, often with very little warning.

Vandalism and theft are two further risks that can impact companies within any industry.

Manufacturers of construction equipment make giant machines composed of complex components ranging from engines and hydraulics as well as heavy steel, glass, and rubber parts. Not only might employees become seriously injured during the assembly process, the same could happen to third parties who attend manufacturing premises.

Furthermore, should a manufacturing error or design fault lead to bodily injury or serious property damage on the part of third parties, the fallout is likely to be nothing short of catastrophic.

Construction equipment manufacturers insurance coverage acts as an essential bodyguard that protects your interests and assets from the many unforeseen circumstances your company could fall victim to, and for this reason, it is absolutely essential to take steps to make sure you have the right insurance plan.

What Type Of Insurance Do Construction Equipment Manufacturers Need?

The kinds of insurance that manufacturers of construction equipment need are influenced by variables that include the location of their manufacturing facility, the exact machines they make, the scope of their activities, and the number of workers they employ.

Only a competent commercial insurance broker familiar with both your field and your specific circumstances can help you build the right insurance plan.

Having said that, certain types of construction equipment manufacturers insurance are invaluable to companies in this industry. They include:

  • Commercial Property: This type of insurance covers your physical assets - your building, but also the assets within and the outdoor property you own - from the financial fallout of perils like theft, vandalism, and acts of nature. The cost of repairing or replacing your manufacturing equipment can be covered, alongside the revenue lost to catastrophes.
  • General Liability: Another must-have form of insurance, commercial general liability insurance protects companies in case of lawsuits filed due to third party property damage or bodily injury caused by their activities or on their premises. That includes, for example, a contractor being injured should construction equipment back into them as it is moved.
  • Product Liability: This type of insurance covers third party bodily injury and property damage claims relating to products you manufacture, whether they are entire machines or merely components included in other machines. Scenarios it would cover include construction workers being injured because one of your components malfunctions on a job site.
  • Workers Compensation: Should an employee suffer a workplace injury, workers' comp covers their medical expenses as well as the wages they lose as a result of medical leave they need to take as they recover. Death benefits also fall under this type of insurance.

Because the manufacture of construction equipment is a complex industry that induces numerous risks, these examples of important kinds of insurance are unlikely to amount to a comprehensive insurance plan.

Speaking with a commercial insurance agent will allow you to discover what additional types of construction equipment manufacturers insurance coverage you require.

Construction Equipment Manufacturing's Risks & Exposures


Premises liability exposure is normally low due to limited access by visitors. If tours are given or if outsiders are allowed on premises, visitors may be injured by slips, trips, or falls. If stock is stored in the open, it becomes attractive to trespassers, particularly children. Fumes and noise from processing may affect properties, resulting in nuisance claims.

Off-premises liability exposures come from exhibitions or demonstrations at retail locations, fairs, or conventions.

Products liability exposure is high due to the high potential for bodily injury to users. Construction equipment is designed for heavy use such as excavating on rugged terrains. Operations may be far away from rapid-response emergency services.

Safety devices must be installed in such a way that they are not easily bypassed or damaged. Machinery may roll over when used on rough terrain, ejecting operators and potentially crushing them.

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. Sharp-edged parts could break off and cause severe injuries. Malfunction in the wiring could present a fire or an electrocution hazard.

Rupture in the fuel lines or tanks could result in an explosion. Construction machinery tends to have a longer use span than other types of motorized equipment. Older equipment made before improved safety features were introduced may still be in use, extending the period for product liability claims to be made.

Environmental impairment exposures can range from moderate to high due to the potential for air, land and water pollution from dust and fuel storage tanks. Raw plastics are flammable and may be toxic, 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, wastewater and by-products disposal 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 exposures can be extremely high. Injuries from production machinery are common, as are minor cuts, burns, slips, trips, 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 injuries from cuts, amputations, burns from welding and heated metal, exposure to dust, and respiratory problems from spray paint or solvents.

Plastics have similar exposures plus a potential for burns from heated machinery and eye and skin irritation from chemicals and resins. Since testing and demonstrations may take place, there can be over-the-road exposures for non-sales employees.

Property exposures consist of offices, plant, and warehouse or yard for storage of raw materials, components, and finished units. 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, 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, dust collection and ventilation systems, electrical control panels and other apparatus. These should be properly maintained and records kept in a central location. A lengthy breakdown could result in severe loss, both direct and under time element.

Crime exposure comes from employee dishonesty and theft as component parts and finished items are high in value. Employees may act alone or in collusion with dealerships or 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. If finished machinery is sent to dealerships under financing provided by the manufacturer, floor plan coverage will be needed. The primary causes of loss are fire, wind, hail, theft, collision, and overturn.

Commercial auto exposure can be high if the manufacturer picks up raw materials or components or delivers finished goods to customers. Transportation of oversized watercraft requires careful loading and tie down to prevent items from coming loose and toppling over during transport. 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 Construction Equipment Manufacturers Insurance Cover & Pay For?

Construction Equipment Manufacturers Insurance Claim Form

Construction Equipment Manufacturers (CEMs) can be sued for a number of reasons. The most common ones include product liability, breach of warranty, negligence, and wrongful death or injury. Let's look at each of these in detail and how insurance helps cover potential legal costs:

1. Product Liability: This arises when a piece of equipment manufactured by the CEM fails or malfunctions, leading to property damage, injuries, or even deaths. The CEM could be held liable if it's proven that the equipment was faulty or not fit for its intended purpose.

Insurance Solution: Product Liability Insurance. This type of insurance can help pay for legal defense costs, settlements, and court awards related to product liability claims. It generally covers three types of claims: manufacturing or production flaws, design defects, and defective warnings or instructions.

2. Breach of Warranty: CEMs often provide warranties promising that their equipment will meet certain standards of performance and quality. If a piece of equipment fails and the customer alleges it's due to a breach of warranty, the manufacturer could be sued.

Insurance Solution: Commercial General Liability (CGL) Insurance. CGL insurance usually includes coverage for advertising and personal injury, which often extends to breach of warranty claims. This coverage can help pay for the legal defense and any damages awarded to the plaintiff.

3. Negligence: If a CEM fails to exercise the care that a reasonable person would do in similar circumstances, leading to harm, they can be sued for negligence. For example, if the CEM knew of a potential issue with their equipment but failed to correct it or notify customers, this could be seen as negligence.

Insurance Solution: Professional Liability Insurance. Also known as Errors and Omissions (E&O) insurance, this coverage helps pay for defense costs and damages related to claims of negligence in the provision of professional services or advice. For a CEM, this could relate to advice given about the use, maintenance, or safety of their equipment.

4. Wrongful Death or Injury: If a piece of construction equipment malfunctions and causes severe injury or death, the family or individual could sue the CEM for damages.

Insurance Solution: Commercial Umbrella Insurance. This type of policy provides an extra layer of liability coverage above the limits of a CEM's other policies, like their CGL or Product Liability Insurance. It can help pay for large legal judgments that exceed the underlying policy's limit, including those related to wrongful death or severe injury claims.

It's important for CEMs to work closely with insurance brokers and legal counsel to ensure they have the right coverage for their specific risks. Insurance is a key part of risk management for any business, including those in the construction equipment manufacturing industry.

Commercial Insurance And Business Industry Classification

Description for 3531: Construction Machinery And Equipment

Division D: Manufacturing | Major Group 35: Industrial And Commercial Machinery And Computer Equipment | Industry Group 353: Construction, Mining, And Materials Handling

3531 Construction Machinery And Equipment: Establishments primarily engaged in manufacturing heavy machinery and equipment of a type used primarily by the construction industries, such as bulldozers; concrete mixers; cranes, except industrial plant overhead and truck-type cranes; dredging machinery; pavers; and power shovels. Also included in this industry are establishments primarily engaged in manufacturing forestry equipment and certain specialized equipment, not elsewhere classified, similar to that used by the construction industries, such as elevating platforms, ship cranes and capstans, aerial work platforms, and automobile wrecker hoists. Establishments primarily engaged in manufacturing mining equipment are classified in Industry 3532; those manufacturing well-drilling machinery are classified in Industry 3533; those manufacturing industrial plant overhead traveling cranes are classified in Industry 3536; and those manufacturing industrial truck-type cranes are classified in Industry 3537.

  • Aerial work platforms, hydraulic or electric truck or carrier mounted
  • Aggregate spreaders
  • Asphalt plants, including travel-mix type
  • Automobile wrecker hoists
  • Backfillers, self-propelled
  • Backhoes
  • Ballast distributors (railway track equipment)
  • Batching plants, bituminous
  • Batching plants, for aggregate concrete and bulk cement
  • Blades for graders, scrapers, dozers, and snowplows
  • Breakers, paving
  • Buckets, excavating: e.g., clamshell, concrete, dragline, drag scraper,
  • Bulldozers, construction
  • Cab, construction machinery
  • Capstans, ship
  • Carriers, crane
  • Chip spreaders, self-propelled
  • Chippers, commercial: brush, limb, and log
  • Concrete buggies, powered
  • Concrete grouting equipment
  • Concrete gunning equipment
  • Concrete plants
  • Construction machinery, except mining
  • Cranes, construction
  • Cranes, except industrial plant
  • Crushers, mineral: portable
  • Derricks, except oil and gas field
  • Distributors (construction machinery)
  • Ditchers, ladder: vertical boom or wheel
  • Dozers, tractor mounted: material moving
  • Draglines, powered
  • Drags, road (construction and road maintenance equipment)
  • Dredging machinery
  • Excavators: e.g., cable, clamshell, crane, derrick, dragline, power
  • Extractors, piling
  • Finishers and spreaders, construction
  • Finishers, concrete and bituminous: powered
  • Grader attachments, elevating
  • Graders, road (construction machinery)
  • Grapples: rock, wood, etc.
  • Grinders, stone: portable
  • Hammer mills (rock and ore crushing machines), portable
  • Hammers, pile driving
  • Line markers, self-propelled
  • Locomotive cranes
  • Log splitters
  • Logging equipment
  • Mixers: e.g., concrete, ore, sand, slag, plaster, mortar, bituminous
  • Mortar mixers
  • Mud jacks
  • Pavers
  • Pile driving equipment
  • Planers, bituminous
  • Plaster mixers
  • Plows, construction: excavating and grading
  • Post hole diggers, powered
  • Power cranes, draglines, and shovels
  • Pulverizers, stone: portable
  • Railway track equipment: e.g., rail layers, ballast distributors
  • Rakes, land clearing: mechanical
  • Road construction and maintenance machinery
  • Rock crushing machinery, portable
  • Rollers, road
  • Rollers, sheepsfoot and vibratory
  • Sand mixers
  • Scarifiers, road
  • Scrapers, construction
  • Screeds and screeding machines
  • Screeners, portable
  • Ship cranes and derricks
  • Ship winches
  • Shovel loaders
  • Shovels, power
  • Silos, cement (batch plant)
  • Slag mixers
  • Snowplow attachments
  • Soil compactors: vibratory
  • Spreaders and finishers, construction
  • Subgraders, construction equipment
  • Subsoiler attachments, tractor-mounts
  • Surfacers, concrete grinding
  • Tampers, powered
  • Tamping equipment, rail
  • Teeth, bucket and scarifier
  • Tractors, construction
  • Tractors, crawler
  • Tractors, tracklaying
  • Trenching machines
  • Trucks, off-highway
  • Vibrators for concrete construction
  • Wellpoint systems
  • Winches, all types
  • Work platforms, elevated

Description for 3532: Mining Machinery And Equipment, Except Oil And Gas Filled Machinery And Equipment

Division D: Manufacturing | Major Group 35: Industrial And Commercial Machinery And Computer Equipment | Industry Group 353: Construction, Mining, And Materials Handling

3532 Mining Machinery And Equipment, Except Oil And Gas Filled Machinery And Equipment: Establishments primarily engaged in manufacturing heavy machinery an equipment used by the mining industries, such as coal breakers, mine cars, mineral cleaning machinery, concentration machinery, core drills, coal cutters, portable rock drills, and rock crushing machinery. Establishments primarily engaged in manufacturing construction machinery are classified in Industry 3531; those manufacturing welldrilling machinery are classified in Industry 3533; and those manufacturing coal and ore conveyors are classified in Industry 3535.

  • Amalgamators (metallurgical and mining machinery)
  • Auger mining equipment
  • Bits, rock: except oil and gas field tools
  • Cages, mine shaft
  • Car dumpers, mining
  • Clarifying machinery, mineral
  • Classifiers, metallurgical and mining
  • Cleaning machinery, mineral
  • Coal breakers, cutters, and pulverizers
  • Concentration machinery (metallurgical and mining)
  • Crushers, mineral: stationary
  • Drills and drilling equipment, mining: except oil and gas field
  • Drills, core
  • Drills, rock: portable
  • Feeders, ore and aggregate
  • Flotation machinery (mining machinery)
  • Grinders, stone: stationary
  • Hammer mills (rock and ore crushing machines), stationary
  • Loading machines, underground: mobile
  • Mining cars and trucks (dollies)
  • Mining equipment, except oil and gas field: rebuilding on a factory
  • Mining machinery and equipment except oil and gas field
  • Ore crushing, washing, screening, and loading machinery
  • Pellet mills (mining machinery)
  • Plows, coal
  • Pulverizers, stone: stationary
  • Scraper loaders, underground
  • Screeners, stationary
  • Sedimentation machinery, mineral
  • Separating machinery, mineral
  • Shuttle cars, underground
  • Stamping mill mining machinery
  • Washers, aggregate and sand: stationary type

Description for 3533: Oil And Gas Filled Machinery And Equipment

Division D: Manufacturing | Major Group 35: Industrial And Commercial Machinery And Computer Equipment | Industry Group 353: Construction, Mining, And Materials Handling

3533 Oil And Gas Filled Machinery And Equipment: Establishments primarily engaged in manufacturing machinery and equipment for use in oil and gas fields or for drilling water wells, including portable drilling rigs. Establishments primarily engaged in manufacturing offshore oil and gas well drilling and production platforms are classified in Industry 3731.

  • Bib, rock: oil and gas field tools
  • Derricks, oil and gas field
  • Drill rigs, all types
  • Drilling tools for gas, oil, or water wells
  • Gas well machinery and equipment
  • Oil and gas field machinery and equipment
  • Water well drilling machinery
  • Well logging equipment
  • Well surveying machinery

Construction Equipment Manufacturers Insurance - The Bottom Line

Not all construction equipment manufacturers insurance policies are designed identically. To discover if your company has the best fit insurance policies - chat with an experienced business insurance broker.

Often they are able to save you on premiums 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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