Electronic Toys And Games Manufacturers Insurance Policy Information
Electronic Toys And Games Manufacturers Insurance. The manufacture of electronic toys encompasses an extremely broad spectrum of different products.
More traditional toys featuring added electronic components fall into this category - dolls that make crying sounds and move their limbs, toy cars with sirens, and interactive globes with light and sound are merely some examples.
Various kinds of video games that can be played on arcade machines, personal computers, smart phones, consoles, or small LCD games played on simple hand-held devices represent a very large portion of this field as well.
Electronic toys and games manufacturers produce electronic enhancements to traditional toys (such as by adding movement or sound) and animated games played interactively by the user. Animated games may be played on a personal computer, connected to a standard television set, or handheld.
With these devices, a user can typically purchase additional games on cartridge, disk or by download from the Internet, or accessories such as handheld controllers and motion detectors. Wireless Internet connectivity is becoming increasingly common.
Arcade games, which are usually coin-operated, or stand-alone devices offering a single game, may also be produced. Manufacturing electronic toys and games involves a variety of operations and exposures.
Some manufacturers may subcontract the separate operations and simply perform the final assembly. The product casing is usually plastic or metal. The interior contains electrical wiring and computerized electronic circuitry.
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 or making peripherals and accessories.
The global video game market alone is worth more than $166 million, and with consumers of all ages always chasing after the latest innovation, creating or manufacturing electronic toys can be an extremely profitable endeavor.
Like all other commercial ventures, companies that create or manufacture electronic toys of all kinds also, however, face the risk that unforeseen circumstances put their company's future in danger.
That is why they should be aware of their electronic toys and games manufacturers insurance needs, and we will walk you through the essentials in this brief guide.
Electronic toys and games 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 electronic toys and games manufacturing insurance questions:
- What Is Electronic Toys And Games Manufacturers Insurance?
- How Much Does Electronic Toys And Games Manufacturers Insurance Cost?
- Why Do Electronic Toys And Games Manufacturers Need Insurance?
- What Type Of Insurance Do Electronic Toys And Games Manufacturers Need?
- What Does Electronic Toys And Games Manufacturers Insurance Cover & Pay For?
What Is Electronic Toys And Games Manufacturers Insurance?
Electronic toys and games manufacturers insurance is a type of insurance coverage designed specifically for manufacturers who produce electronic toys and games. It provides protection against various risks and losses that may arise from the manufacturing and distribution of electronic toys and games, such as product liability, property damage, theft, and intellectual property infringement.
This insurance covers the costs associated with defending a claim, settling a claim, or paying damages in the event of a lawsuit. It helps electronic toy and game manufacturers secure their business and mitigate financial losses from potential claims or lawsuits.
How Much Does Electronic Toys And Games Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small electronic toys and games manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Electronic Toys And Games Manufacturers Need Insurance?
Because this field is so diverse, some companies that create electronic toys will be manufacturers producing physical toys, while other businesses create products that exist purely as digital assets in the form of software.
While the risks facing companies that make electronic toys greatly depend on the products they create, risk itself is universal.
Your company may own and operate a large factory where it produces physical electronic toys, or it may work in an office space where developers do most of the labor. Either way, you will have physical assets that may include manufacturing equipment, a building, and computers, as well as digital intellectual property.
Regardless of the exact nature of the electronic toys you produce, that leaves you vulnerable to criminal acts like (data) theft or vandalism. Acts of nature as varied as earthquakes, floods, and lightning strikes can, likewise, cause damage to any company that owns or rents a workspace.
In all fields of work, employees can sustain workplace injuries or occupational injuries, whether repetitive stress injury, falls, or cuts sustained while operating a production line - and in many cases, the employer may be held liable.
Lawsuits are another substantial financial threat. They can result from accusations of plagiarism, from end consumers being harmed by your product (physically or mentally), or when a third party has an accident on your premises.
All these perils, as well as numerous others, easily lead to massive costs that can be devastating without the correct insurance coverage.
That is why it is important to do your due diligence as you decide what kinds of electronic toys and games manufacturers insurance your company needs to invest in.
Electronic toys and games manufacturers insurance is important because when something goes wrong, the proper coverage will be there to catch you.
What Type Of Insurance Do Electronic Toys And Games Manufacturers Need?
The modern commercial insurance market offers countless types of coverage that protect companies against all conceivable threats.
The kinds of insurance you will want to arm yourself with depends on factors like the type of product you make, whether your company produces physical products or software, the size of your company and its production output, and the number of workers you employ.
Due to the complex nature of these decisions, partnering with a skilled commercial insurance agent who has your best interests at heart is crucial. However, some of the most important types of electronic toys and games manufacturers insurance needed include:
- Commercial Property: Essential to any company that operates within a physical building, whether they rent or own the property, commercial property insurance covers your building and its contents against unforeseen circumstances like theft, fire, vandalism, and other accidents.
- Commercial General Liability: This kind of insurance, which pays for legal defense costs if a third party is injured on your premises or your company's activities cause damage to another's property, is a basic kind of electronic toys and games manufacturers insurance that every business needs.
- Product Liability: This type of insurance relates to third party claims pertaining to products you create. If a child who uses a doll you made become injured due to a malfunction, for example, product liability insurance helps cover the resulting legal costs.
- Cyber: Another type of liability insurance, cyber insurance is particularly crucial for software companies, and especially if they make direct sales and as such hold buyers' personal data. In case of data breaches and digital theft, it shields you from the financial fallout.
- Workers' Compensation: This type of insurance covers the medical bills and any lost income for employees (but not contractors or freelancers) who suffer workplace injuries or accidents of various kinds.
The diversity of the electronic toy industry makes it all the more important to discuss your insurance needs with a commercial insurance broker at length; while these kinds of coverage go a long way toward protecting you against the risks you face, you may require additional types of electronic toys and games manufacturers insurance as well.
Electronic Toys And Games Manufacturing's Risks & Exposures
Premises liability exposure is generally light as access to the premises is limited. If there is a showroom, factory outlet, or retail operation, or if the company handles its own on-site testing using focus groups, visitors may be injured by slips, trips, or falls.
Children may be injured by playing with defective products while on premises. Fumes, dust, and noise from work with plastic or metal may affect neighbors. There are significant off-premises exposures at promotional events and gamers' conferences.
Products liability exposure can be high as many of these products are targeted to or used by children. Malfunction in the wiring could present a fire or electrocution hazard. Cords and cables represent potential tripping hazards. Small parts in electronics designed for children's use could present a choking hazard. Sharp edges could result in cuts and other injuries.
Cumulative radiation from screens and monitors could result in claims. Manufacturers who produce accessories and add-ons for use with multiple systems could incur claims if their products cause property damage to an incompatible system.
User instruction and warranty information is very important. Warnings and age-appropriate information are needed, as are product recall procedures. Governmental regulations, guidelines, and standards must be observed.
Environmental impairment exposure is high due to possible contamination of ground, air, and water from chemicals and toxic lubricants, solvents and paints. Raw materials may be toxic or flammable. Catalysts may be caustic, and the final product is usually not biodegradable. Storage and disposal procedures must adhere to all EPA and other regulatory standards.
Workers compensation exposure can be very high. Injuries from production machinery are common, as are burns, cuts, puncture wounds, slips, trips, falls, foreign objects in the eye, hearing impairment from noise, back injuries from lifting, and repetitive motion injuries. Workstations should be ergonomically designed.
Exposure to chemicals can cause skin and eye irritation, plus lung problems. The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair to increase production. Workers must be made aware of the potential side effects of the ingredients they work with, including long-term occupational disease hazards, so they can recognize symptoms and obtain treatment as early as possible.
Property exposures consist of office, production plant, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating and cooling equipment, production machinery, and the build-up of metal 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. Welding and soldering must be done away from combustibles and flammable liquids. Metal housing may require soldering, electroplating, or annealing. 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.
Production of electronic circuitry is often done in a sterile environment to prevent contamination by dust or static. Many electronic appliances have a high susceptibility to smoke and other contamination. A very small fire can cause total damage if there is not adequate separation of the storage from the possible ignition sources.
Electronic toys and games 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.
There can be a significant business income and extra expense exposure, depending on the amount of time required to restore operations.
Equipment breakdown exposures include malfunctioning production equipment, dust collection and ventilation systems, electrical control panels and other apparatus. A lengthy breakdown to production machinery could result in a severe loss, both direct and under time element.
Crime exposures are moderate to high for employee dishonesty and theft. Employees may act alone or in collusion with outsiders in stealing money, raw materials, or finished stock, which may include brand names, limited edition sets, or popular "must have" Christmas items.
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 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.
Raw stock and work in process may be transported between different buildings or locations. The primary causes of loss are from breakage, fire, theft, collision, overturn, and water damage.
Commercial auto exposure may be high if the manufacturer transports raw materials or finished products. Because finished goods are theft targets for theft, vehicles used in transport should have appropriate crime protective devices. 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 Electronic Toys And Games Manufacturers Insurance Cover & Pay For?
Electronic Toys and Games Manufacturers, like any business, face several potential legal risks that could lead to lawsuits. The following are some examples of these risks, along with explanations of how insurance could potentially assist in such situations:
1. Product Liability: If an electronic toy or game is defective and causes harm to a user, the manufacturer could be held liable. For example, a child could be injured by a toy with sharp edges or small parts, or an electronic game could cause a fire due to faulty wiring. In such cases, Product Liability Insurance would come into play. This insurance helps cover the costs of legal defense, settlements, and judgments arising from claims of bodily injury or property damage due to defective products.
2. Intellectual Property Infringement: A company might sue an Electronic Toys and Games Manufacturer for infringing on a patent, trademark, or copyright. For instance, a manufacturer could be accused of copying the design of another company's popular toy or game. Intellectual Property Insurance can help in these situations. It covers the costs associated with defending against claims of infringement and any judgments or settlements that may be awarded.
3. Breach of Contract: If a manufacturer fails to deliver products as per a contractual agreement with a retailer or distributor, they could face a lawsuit. Commercial General Liability Insurance often includes coverage for personal and advertising injury, which can include some types of contractual liability. This could help cover the legal costs associated with defending against a breach of contract claim and any damages awarded.
4. Data Breach: Electronic games manufacturers that collect and store customer data, such as names, addresses, or credit card information, could be sued if this data is compromised in a breach. Cyber Liability Insurance can help in this case. It typically covers costs related to a data breach, including legal defense costs, notification costs, credit monitoring for affected individuals, and any fines or penalties that may be imposed.
Remember, the extent of coverage and the specifics of what is covered will depend on the details of the insurance policy. It's essential for companies to carefully review their policies and understand what is and isn't covered.
Commercial Insurance And Business Industry Classification
- SIC CODE: 3944 Games, Toys, And Children's Vehicles, Except Dolls And Bicycles, 7372 Prepackaged Software
- NAICS CODE: 339930 Doll, Toy, and Game Manufacturing, 334614 Software and Other Prerecorded Compact Disc, Tape, and Record Reproducing
- Suggested Workers Compensation Code(s): 3179 Electrical Apparatus Manufacturing NOC
Description for 3944: Games, Toys, And Children's Vehicles, Except Dolls And Bicycles
Division D: Manufacturing | Major Group 39: Miscellaneous Manufacturing Industries | Industry Group 394: Dolls, Toys, Games And Sporting And Athletic
3944 Games, Toys, And Children's Vehicles, Except Dolls And Bicycles: Establishments primarily engaged in manufacturing games and game sets for adults and children, and mechanical and nonmechanical toys. Important products of this industry include games; toy furniture; doll carriages and carts; construction sets; mechanical trains; toy guns and rifles; baby carriages and strollers; children's tricycles, coaster wagons, play cars, sleds, and other children's outdoor wheel goods and vehicles, except bicycles. Included are establishments primarily engaged in manufacturing electronic board games; electronic toys; and electronic game machines, except coin-operated. Establishments primarily engaged in manufacturing dolls and stuffed toys are classified in Industry 3942; those manufacturing bicycles are classified in Industry 3751; those manufacturing sporting and athletic goods for children and adults are classified in Industry 3949; those manufacturing coin-operated game machines are classified in Industry 3999; those manufacturing electronic video game cartridges are classified in Services, Industry 7372; and those manufacturing rubber toys, except dolls, are classified in Industry 3069.
- Airplanes, toy
- Automobiles and trucks, toy
- Automobiles, children's pedal driven
- Banks, toy
- Baskets, toy
- Bells, toy
- Blocks, toy
- Carriages, baby
- Cars, play (children's vehicles)
- Craft and hobby kits and sets
- Cycles, sidewalk: children's
- Darts and dart games
- Dishes, toy
- Doll carriages and carts
- Drums, toy
- Electronic game machines, except coin-operated
- Electronic toys
- Engines, miniature
- Erector sets, toy
- Games for children and adults: puzzles, bingo, marbles, poker chips,
- Gocarts, children's
- Guns, toy
- Hobby horses
- Horns, toy
- Magic lanterns (toys)
- Models, toy and hobby: e.g., airplane, boat, ship, railroad equipment
- Musical instruments, toy
- Paint sets, children's
- Pistols, toy
- Poker chips
- Rifles, toy
- Rocking horses
- Science kits: microscopes, chemistry sets, and natural science sets
- Scooters, children's
- Sleds, children's
- Strollers, baby (vehicles)
- Structural toy sets
- Sulkies, baby (vehicles)
- Tenders, baby (vehicles)
- Toys: except dolls, bicycles, rubber toys, and stuffed toys
- Trains and equipment, toy: electric an mechanical
- Tricycles, children's
- Vehicles except bicycles, children's
- Video game machines, except coin-operated
- Wagons, children's: coaster, express, and play
- Walkers, baby (vehicles)
Description for 7372: Prepackaged Software
Division I: Services | Major Group 73: Business Services | Industry Group 737: Computer Programming, Data Processing, And Other Computer Related Services
7372 Prepackaged Software: Establishments primarily engaged in the design, development, and production of prepackaged computer software. Important products of this industry include operating, utility, and applications programs. Establishments of this industry may also provide services such as preparation of software documentation for the user-installation of software for the user; and training the user in the use of the software. Establishments primarily engaged in providing preparation of computer software documentation and installation of software on a contract or fee basis are classified in Industry 7379, and those engaged in training users in the use of computer software are classified in Industry 8243. Establishments primarily engaged in buying and selling prepackaged computer software are classified in Trade; those providing custom computer programming services are classified in Industry 7371; and those developing custom computer integrated systems are classified in Industry 7373.
- Applications software, computer prepackaged
- Computer software publishers, prepackaged
- Games, computer software: prepackaged
- Operating systems software, computer: prepackaged
- Software, computer: prepackaged
- Utility software, computer: prepackaged
Electronic Toys And Games Manufacturers Insurance - The Bottom Line
Not all electronic toys and games manufacturers insurance policies are similar - they can vary in cost and coverage. You can learn if your company has the best fit insurance policies by talking to 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.
- 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.