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Industrial Machinery Manufacturers Insurance Policy Information

Industrial Machinery Manufacturers Insurance

Industrial Machinery Manufacturers Insurance. Manufacturers of industrial equipment and machinery make the very equipment that other manufacturers rely on to produce their own products.

Industrial machinery manufacturers produce a wide variety of products for industrial customers. Products may be component parts or entire processing systems, including conveyors, cutting, forming, polishing, or stamping equipment.

The process consists of working with customers to identify specifications, 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. The manufacturer may offer installation services for larger or more complex items.

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

The manufacturer may produce the internal electronic or electrical assemblies, or purchase them pre-made from another manufacturer and simply assemble the final product.

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

Any machine that is essential to the manufacturing process can be considered to fall into this category, and some important examples of industrial equipment would be industrial robots, lumber mills, kilns, cranes, and cooling systems.

Although some industrial machines are compact, manufacturers of this type of equipment are often responsible for the production of massive equipment consisting of numerous mechanical and computerized components.

Manufacturers in this branch of industry play a vital role in the global economy, as they enable other manufacturers to effectively and successfully run their businesses. Like the many manufacturers they will supply with industrial machinery and equipment, however, they are also exposed to numerous risks.

It is, therefore, important to consider what types of insurance coverage manufacturers of industrial equipment and machinery can count on in the even that the worst happens.

Industrial machinery 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 industrial machinery manufacturing insurance questions:

What Is Industrial Machinery Manufacturers Insurance?

Industrial machinery manufacturers insurance is a type of insurance coverage specifically designed for companies that manufacture or design industrial machinery or equipment.

It provides protection against the financial risks associated with the production and sale of these machines, including damage to machinery or equipment during the manufacturing process, liability claims arising from the use of the machinery, and business interruption caused by a covered event. This insurance can also provide coverage for losses related to product recalls, errors and omissions, and damage to property and equipment.

The coverage may vary based on the specific needs and risks of the company, but typically includes property damage, general liability, product liability, and business interruption insurance.

How Much Does Industrial Machinery Manufacturers Insurance Cost?

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

Why Do Industrial Machinery Manufacturers Need Insurance?

Insurance For Manufacturers

While certain types of insurance will be mandated within certain jurisdictions or by lenders you may rely on, manufacturers of industrial insurance will best serve their business interests by evaluating the full spectrum of commercial insurance options offered within the modern market.

By investing not only in the bare minimum but going above and beyond, a company can set itself up for future success even in the event unforeseen circumstances temporarily threaten their revenue.

A water-tight insurance plan can save your company from the otherwise massive costs associated with (physical as well as digital) theft, vandalism, and acts of nature like wildfires, earthquakes, or hurricanes. It can protect you from financial losses resulting from sudden equipment breakdown or other accidental loss of or damage to physical assets.

Excellent insurance coverage likewise shields you from the many liability risks your company could face. Employees can sustain workplace injuries, and third parties who are present on your property for whatever reason may suffer minor or major accidents.

Over the course of your manufacturing process or while delivering industrial equipment, your company may cause third party property damage. Should industrial equipment manufactured by your company malfunction, the potential consequences include both bodily injury and property damage - and even if the problem was ultimately caused by the operator, falling outside of the scope of your responsibility, you may still face costly lawsuits.

By having the right Industrial machinery manufacturers insurance coverage, manufacturing companies can focus on maintaining and expanding their businesses without worrying that these and other unpreventable and unpredictable circumstances may lead to the closure of the business.

What Type Of Insurance Do Industrial Machinery Manufacturers Need?

The best insurance plans are custom-designed for your particular company, together with a commercial insurance agent.

The types of coverage that will best protect a manufacturer of industrial equipment and machinery depends on factors that include the exact types of equipment they make, the location of their manufacturing plant, their number of employees, and how and how far the equipment is generally transported.

Some of the types of industrial machinery manufacturers insurance that firms in this industry cannot do without are:

  • Commercial General Liability: This broadest form of liability insurance covers many but not all types of bodily injury or property damage claims made by third parties. Specifically, it helps replace attorney fees, settlement costs, and repair or medical bills. One common scenario in which you would rely on commercial general liability insurance is one in which someone who does not work for you sustains an injury on your premises.
  • Product Liability: A manufacturer continues to be responsible for aspects of their products even long after the equipment is sold. Should equipment made by you malfunction due to an error on your part, and this leads to property damage or bodily injury, the costs can be devastating. Product liability insurance helps to cover your legal costs if anyone alleges that your equipment caused them harm.
  • Commercial Property: This form of industrial machinery manufacturers insurance protects you from financial losses caused by damage to your property - including your physical building, manufacturing equipment, computers, and other physical assets. Damage or loss due to theft, vandalism, and certain acts of nature are generally covered.
  • Workers Compensation: In the event that an employee sustains a workplace injury not solely caused by their own negligence, your company will be liable for the resulting costs. This type of insurance provides the funds to cover such employees' medical expenses as well as any income they lose if they are unable to return to work.

Bear in mind that these types of industrial machinery manufacturers insurance will be absolutely essential in protecting the financial health of any company that makes industrial equipment, but that you most likely need additional coverage as well.

Industrial Machinery 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. Fumes, dust, and noise from processing could affect neighbors, resulting in nuisance claims.

Off-premises liability exposures may come from exhibitions or demonstrations at retail locations, fairs, or conventions. Off-site installation services offered to customers can cause bodily injury or property damage.

Products liability exposure can be moderate to high. If the insured is involved in design work or the machine is used in critical operations for certain industries, such as automotive, aeronautics, medical fields, military uses, or industrial machinery, the exposure will be higher.

Any machine that is used in assembly production with cutting and punching will have a high potential for loss, either from defects in design or product malfunction or improper use. Safety devices must be installed in such a way that they are not easily bypassed or damaged. The failure of material handling machinery (cranes, conveyors, hoists) may cause massive property damage and costly downtime.

Warning labels regarding dangers of personal injury and instructions for proper use must be posted on the machine. Machines must be ergonomically designed to protect the end user from repetitive motion injuries. It may be impossible to defend against questionable claims unless there is an aggressive quality control program including high standards for materials, testing and monitoring of components, and documentation.

Industrial machinery tends to have a long life span. Older equipment made before improved safety features were introduced may still be in use.

Environmental impairment exposures are moderate to high due to the potential for air, land and water pollution from dust and fuel storage tanks. Contaminants may come from the chemicals, paint, and solvents and metal wastes. Vapors, fumes and air pollutants, wastewater and disposal of by-products 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 from welding or chemicals, slips, trips, falls, foreign objects in the eye, back injuries from lifting, hearing loss from noise, and repetitive motion injuries. 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 amputations, burns from welding and heated metal, exposure to dust, and respiratory problems from spray paint or solvents.

Plastic parts 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 an office, 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 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 installation services are offered, an installation floater will be needed. The primary causes of loss are fire, theft, collision, overturn, and water damage.

Business auto exposure can be high if the manufacturer picks up raw materials or components or delivers finished goods to customers. Transportation of oversized equipment 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 Industrial Machinery Manufacturers Insurance Cover & Pay For?

Industrial Machinery Manufacturers Insurance Claim Form

Industrial Machinery Manufacturers face a variety of potential legal challenges that may result in lawsuits. These risks can stem from various sources such as product liability, workplace accidents, intellectual property disputes, or contractual issues. Appropriate insurance coverage can protect against these risks, providing financial and legal support in the event of a lawsuit. Here are some examples:

1. Product Liability: If a piece of machinery malfunctions and causes harm or damage, the manufacturer could be sued for product liability. For instance, if a safety feature fails and a worker gets injured, the manufacturer could be held responsible. In such cases, Product Liability Insurance can help. This insurance covers the cost of legal defense and any potential settlement or judgment, up to the policy limit. Therefore, it can protect the manufacturer from significant financial loss.

2. Workplace Accidents: If an employee gets injured while manufacturing or testing machinery, the manufacturer could be sued for failing to provide a safe working environment. Workers' Compensation Insurance can help in these situations. It covers medical expenses, lost wages, and legal costs if an employee sues over a work-related injury or illness. This insurance not only protects the employees but also safeguards the manufacturer against lawsuits stemming from workplace injuries.

3. Intellectual Property Disputes: Industrial machinery manufacturers could also be sued for allegedly infringing on another company's patents or trademarks. Intellectual Property Insurance is designed to cover the legal costs associated with such disputes. It can pay for defense costs, settlements, and judgments related to claims of intellectual property infringement.

4. Contractual Issues: A manufacturer might be sued if they fail to meet the terms of a contract, such as not delivering machinery on time or not meeting agreed-upon specifications. Commercial General Liability Insurance often includes coverage for personal and advertising injury, which can provide coverage for certain types of contractual disputes. This insurance can cover the legal costs related to these lawsuits and any damages awarded.

5. Environmental Liability: Industrial Machinery Manufacturers could potentially face lawsuits related to environmental pollution. If manufacturing processes lead to pollution that harms the environment or local communities, manufacturers could be held liable. Environmental Liability Insurance, or Pollution Liability Insurance, can cover the costs of legal defense, cleanup efforts, and damages related to pollution caused by a company's operations.

Insurance plays a crucial role in mitigating the risks associated with running an industrial machinery manufacturing business. By understanding potential risks and obtaining the appropriate insurance coverage, manufacturers can protect themselves against significant financial losses and continue to focus on their core business operations.

Commercial Insurance And Business Industry Classification

Description for Major Group 35: Industrial And Commercial Machinery And Computer Equipment

This major group includes establishments engaged in manufacturing industrial and commercial machinery and equipment and computers.

Included are the manufacture of engines and turbines; farm and garden machinery; construction, mining, and oil field machinery; elevators and conveying equipment; hoists, cranes, monorails, and industrial trucks and tractors; metalworking machinery; special industry machinery; general industrial machinery; computer and peripheral equipment and office machinery; and refrigeration and service industry machinery.

Machines powered by built-in or detachable motors ordinarily are included in this major group, with the exception of electrical household appliances. Power-driven handtools are included in this major group, whether electric or otherwise driven.

Establishments primarily engaged in manufacturing electrical equipment are classified in Major Group 36, and those manufacturing handtools, except powered, are classified in Major Group 34.

Industry Group 352: Farm And Garden Machinery And Equipment
  • 3523 Farm Machinery And Equipment
  • 3524 Lawn And Garden Tractors And Home Lawn And Garden Equipment

Industry Group 353: Construction, Mining, And Materials Handling
  • 3531 Construction Machinery And Equipment
  • 3532 Mining Machinery And Equipment, Except Oil And Gas Field Machinery And Equipment
  • 3533 Oil And Gas Field Machinery And Equipment
  • 3534 Elevators And Moving Stairways
  • 3535 Conveyors And Conveying Equipment
  • 3536 Overhead Traveling Cranes, Hoists, And Monorail Systems
  • 3537 Industrial Trucks, Tractors, Trailers, And Stackers

Industry Group 354: Metalworking Machinery And Equipment
  • 3541 Machine Tools, Metal Cutting Types
  • 3542 Machine Tools, Metal Forming Types
  • 3543 Industrial Patterns
  • 3544 Special Dies And Tools, Die Sets, Jigs And Fixtures, And Industrial Molds
  • 3545 Cutting Tools, Machine Tool Accessories, And Machinists' Precision Measuring Devices
  • 3546 Power-Driven Handtools
  • 3547 Rolling Mill Machinery And Equipment
  • 3548 Electric And Gas Welding And Soldering Equipment
  • 3549 Metalworking Machinery, Not Elsewhere Classified

Industry Group 355: Special Industry Machinery, Except Metalworking
  • 3552 Textile Machinery
  • 3553 Woodworking Machinery
  • 3554 Paper Industries Machinery
  • 3555 Printing Trades Machinery And Equipment
  • 3556 Food Products Machinery
  • 3559 Special Industry Machinery, Not Elsewhere Classified

Industry Group 356: General Industrial Machinery And Equipment
  • 3561 Pumps And Pumping Equipment
  • 3562 Ball And Roller Bearings
  • 3563 Air And Gas Compressors
  • 3564 Industrial And Commercial Fans And Blowers And Air Purification Equipment
  • 3565 Packaging Machinery
  • 3566 Speed Changers, Industrial High-Speed Drives, And Gears
  • 3567 Industrial Process Furnaces And Ovens
  • 3568 Mechanical Power Transmission Equipment, Not Elsewhere Classified
  • 3569 General Industrial Machinery And Equipment, Not Elsewhere

Industrial Machinery Manufacturers Insurance - The Bottom Line

Not all industrial machinery manufacturers insurance policy are similar - in fact they can and do vary a lot in premiums, coverages and also exclusions. You can see if your manufacturing business has the best fit insurance policies by talking to an experienced commercial 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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