Rug Manufacturers Insurance

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Rug Manufacturers Insurance Policy Information

Rug Manufacturers Insurance

Rug Manufacturers Insurance. Rugs are generally defined as thick and woven fabrics designed for relatively small areas, as opposed to carpets, which would cover wall-to-wall areas.

Rug and carpet manufacturers produce textile floor and wall coverings. Carpeting generally refers to floor coverings that are permanently attached using nails, tack strips, rods, or adhesives, while rugs refer to those that are loose-laid and easily moved.

Carpeting and rugs may be produced from natural or synthetic fibers. Natural fibers come from animal, plant, and insect sources, and include cotton, hair, linen, silk and wool. Common synthetic fibers include acrylic, nylon, polyester and polypropylene.

Natural and synthetic fibers may be blended to produce desired qualities such as comfort, durability, or water resistance. While many carpets are woven on looms, some are made by hooking fibers together. Binding is sewn or glued at the edges to prevent raveling.

Large "tufted-knot" carpets are produced by tying short carpet piles onto large mesh mats, then shaving the pile into a uniform or sculptured height. Large industrial looms can produce room-sized carpeting with the piles tied by machine. Fibers may be treated to resist stains or retard fire.

Foam rubber backing may be glued onto carpet to provide cushioning and skid resistance. The processes are almost entirely automated.

Made on rug looms, rugs are used all over the globe and can be manufactured using natural materials like silk, wool, cotton, and jute as well as synthetic fibers.

While some rugs are mass produced for budget-friendly markets, others are lovingly crafted by hand in workshops that will cater to luxury markets. This industry is a varied one that has endured for centuries and still holds a lot of economic potential.

If you own and operate a company that produces rugs, however, you are also aware that your business is vulnerable to a range of risks.

Rug manufacturers insurance can never be left out of the conversation when you are thinking about ways to protect your business - so let's examine what kinds of insurance a company that makes rugs might require.

Rug 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 rug manufacturing insurance questions:


How Much Does Rug Manufacturers Insurance Cost?

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


Why Do Rug Manufacturers Need Insurance?

Insurance For Manufacturers

The field of rug manufacture encompasses large-scale industrial plants, boutique companies that have been passed down through generations, and also small new "craftpreneurs" hoping to establish their businesses from the ground up.

No matter what category you might fall into, as soon as your business begins taking off, the risks also start to pile on.

Your physical manufacturing facility and the assets therein are vulnerable to threats like acts of nature (earthquakes, wildfires, floods, hurricanes, and other disasters), but even theft and vandalism pose a risk.

Expensive equipment like looms or machines you use to process fibers could break down, leading to repair or replacement costs while simultaneously forcing you to halt production for a time.

If you use natural materials in the production of your rugs, there is the risk that they will be compromised by pests or molds. Larger rug manufacturers also very much have to consider the risk that an employee could be injured on the job, after which they become liable for medical costs.

Some risks lead to significant financial setbacks that essentially undo much of the hard work you put into building your company, while others could even drive you to bankruptcy.

The right rug manufacturers insurance coverage will take care of a good portion of those costs, however, allowing your company to thrive once again.


What Type Of Insurance Do Rug Manufacturers Need?

Rug manufacturers will need to carry several different types of insurance to safeguard their business against the many threats it will face

Because your exact insurance needs depend on variables like the location of your manufacturing facility, your output quantities, your number of employees, and the equipment you use, no general guide can explain what types of insurance your company requires.

A business insurance broker is key to helping you discover your needs. However, all but the very smallest companies will unquestionably require the following rug manufacturers insurance policies:

  • Commercial Property: This type of insurance protects your business from financial losses resulting from unforeseen circumstances that include theft, vandalism, and acts of nature. Both your physical building and the assets inside (like raw materials, equipment, and finished inventory) are covered in the event these perils affect your business, and lost revenue due to production interruptions may also be covered.
  • Commercial General Liability: This form of rug manufacturers insurance protects your company in case a third party - in this context, essentially, anyone you do not employ - is injured within your manufacturing facility. Should your company's activities do damage to third party property, that is also covered. Specifically, commercial general liability insurance is designed to compensate you for the legal and settlement costs you may incur.
  • Workers Compensation: Generally speaking, any company that has W2 employees will require this form of insurance. It covers their medical bills and any lost wages in the event they are injured over the course of their job.


Companies that make rugs have vastly differing needs owing to the diversity of this industry. You may have additional rug manufacturers insurance needs as well. Product liability insurance protects your financial interests if an end user sustains injuries or property damage caused by your products, for example, while vehicle and inland marine insurance cover transportation-related risks.

Equipment breakdown insurance is invaluable for companies that run mass-scale industrial operations.

Because each company is unique, and their insurance needs are just as situation-dependent, consulting a commercial insurance agent is a step you cannot skip.

Rug Manufacturing's Risks & Exposures

Manufacturing

Premises liability exposure is normally low due to limited access by visitors. If the manufacturer has a showroom or offers tours, visitors may be injured by slips, trips, or falls. Chemicals used in the coating and finishing may be corrosive and/or toxic. Fumes, spills or leaks may cause serious injury or property damage to neighboring premises.

Products liability exposure is low to moderate, as long as all standards of flammability of the final product are met. Labeling for content is important to prevent allergic reaction claims.

Environmental impairment exposure is due to the chemicals used to finish and coat rugs. Fumes and improper disposal of scrap can result in air, ground, or water contamination. Disposal procedures must adhere to all EPA and other regulatory standards.

Workers compensation exposure is high. Many of the chemicals used to finish and coat the rugs are toxic. Special controls are needed to prevent skin and eye irritations, as well as serious lung and respiratory problems. Injuries from production machinery are common, as are burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, and back injuries from lifting.

Workers could become exhausted or overheated due to high temperatures and inadequate ventilation. 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.

The high volume required for production schedules may lead workers to remove guards on the machinery, or to postpone maintenance and repair. Repetitive motion injuries can result from ongoing use of machinery. Workstations should be ergonomically designed.

Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations.

Property exposures consist of an office, production plant, and warehouse for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, and production machinery.

Chemicals used in fabric dyeing or coating are often flammable and should be properly labeled, separated, and stored in approved containers. Cutting and sewing operations generate dust which can explode if ignited. This hazard increases in the absence of well-maintained dust collection systems attached to the cutting and sewing stations.

Loose fibers, scrap materials, and chemicals used to finish the rug are combustible, especially if poorly stored without adequate aisle space and shelving. Raw materials, supplies, scrap, and finished goods are susceptible to damage by fire or smoke, water and moisture, or temperature. Minor fires may result in major inventory losses.

Poor housekeeping, such as failure to collect and dispose of scraps on a regular basis, could contribute significantly to a loss. Unless disposed of properly, greasy, oily rags (such as those used to clean the machinery) can spontaneously combust.

Sprinkler systems may be advisable. High-valued items may be targets for theft. Appropriate security controls must 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 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.

Crime exposure comes from employee dishonesty and theft due to the relatively high value of some rugs. 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 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), exhibitions, 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. Goods in transit may be damaged by fire, collision, overturn, theft, and water damage.

Business auto exposure may be high if the manufacturer transports raw materials or finished products. 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. The exposure increases if the manufacturer owns its tanker trucks and transports the chemicals used to finish and coat the rugs. Drivers of these vehicles must have a Hazardous Material Endorsement on his or her Commercial Driver Licenses and be trained to contain spills.

Commercial Insurance And Business Industry Classification

  • SIC CODE: 2273 Carpets And Rugs
  • NAICS CODE: 314110 Carpet and Rug Mills
  • Suggested ISO General Liability Code(s): 51777
  • Suggested Workers Compensation Code(s): 2402

Description for 2273: Carpets And Rugs

Division D: Manufacturing | Major Group 22: Textile Mill Products | Industry Group 227: Carpets And Rugs

2273 Carpets And Rugs: Establishments primarily engaged in manufacturing woven, tufted, and other carpets and rugs, such as art squares, floor mattings, needle punch carpeting, and door mats and mattings, from textile materials or from twisted paper, grasses, reeds, coir, sisal, jute, or rags.

  • Aircraft floor coverings, except rubber or plastics
  • Art squares, textile fiber
  • Art squares: twisted paper, grass, reed, coir, sisal, jute, and rag
  • Automobile floor coverings, except rubber or plastics
  • Axminster carpets
  • Bathmats and sets, textile
  • Carpets, textile fiber
  • Carpets: twisted paper, grass, reed, coir, sisal, jute, and rag
  • Chenille rugs
  • Door mats: twisted paper, grass, reed, coir, sisal, jute, and rag
  • Dyeing and finishing of rugs and carpets
  • Floor coverings, textile fiber
  • Floor coverings: twisted paper, grass, reed, coir, sisal, jute, and rag
  • Mats and matting, textile
  • Mats and matting: twisted paper, grass, reed, coir, sisal, jute, and rag
  • Rugs, except rubber or plastics
  • Scatter rugs, except rubber or plastics
  • Smyrna carpets and rugs, machine woven
  • Wilton carpets

Rug Manufacturers Insurance - The Bottom Line

All rug manufacturers insurance policies do not have the same coverage, costs and exclusions. To discover if your rug manufacturing operation has the best fit insurance policies - talk 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.

Types Of Small Business Insurance - Requirements & Regulations

Perhaps you have the next great idea for a product or service that you know will appeal to your local area. If you've got a business, you've got risks. Unexpected events and lawsuits can wipe out a business quickly, wasting all the time and money you've invested.

Operating a business is challenging enough without having to worry about suffering a significant financial loss due to unforeseen and unplanned circumstances. Small business insurance can protect your company from some of the more common losses experienced by business owners, such as property damage, business interruption, theft, liability, and employee injury.

Purchasing the appropriate commercial insurance coverage can make the difference between going out of business after a loss or recovering with minimal business interruption and financial impairment to your company's operations.

Small Business Information

Insurance is so important to proper business function that both federal governments and state governments require companies to carry certain types. Thus, being properly insured also helps you protect your company by protecting it from government fines and penalties.

Small Business Insurance Information

In the business world, there are many risks faced by company's every day. The best way that business owners can protect themselves from these perils is by carrying the right insurance coverage.

The The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight.

Commercial insurance is particularly important for small business owners, as they stand to lose a lot more. Should a situation arise - a lawsuit, property damage, theft, etc. - small business owners could end up facing serious financial turmoil.

According to the SBA, having the right insurance plan in place can help you avoid major pitfalls. Your business insurance should offer coverage for all of your assets. It should also include liability and casual coverage.

Types Of Small Business Insurance

Choosing the right type of coverage is absolutely vital. You've got plenty of options. Some you'll need. Some you won't. You should know what's available. Once you look over your options you'll need to conduct a thorough risk assessment. As you evaluate each type of insurance, ask yourself:

  • What type of business am I running?
  • What are common risks associated with this industry?
  • Does this type of insurance cover a situation that could feasibly arise during the normal course of doing business?
  • Does my state require me to carry this type of insurance?
  • Does my lender or do any of my investors require me to carry this type of policy?

A licensed insurance agent or broker in your state can help you determine what kinds of coverages are prudent for your business types. If you find one licensed to sell multiple policies from multiple companies (independent agents) that person can often help you get the best insurance rates, too. Following is some information on some of the most common small business insurance policies:

Business Insurance Policy Type What Is Covered?
General Liability InsuranceWhat is covered under commercial general liability insurance? It steps in to pay claims when you lose a lawsuit with an injured customer, employee, or vendor. The injury could be physical, or it could be a financial loss based on advertising practices.
Workers Compensation InsuranceWhat is covered under workers compensation insurance? This type of insurance protects a business and its owner(s) from claims by employees who suffer a work-related injury, illness or disease. Workers comp typically provides the injured employee with benefits to cover medical expenses, a portion of his/her lost wages, rehabilitation costs if applicable, and permanent partial or permanent total disability.
Product Liability InsuranceWhat is covered under product liability insurance? I pays an injured party's settlement or lawsuit claim arising from a defective product. These are usually caused by design defects, manufacturing defects, or a failure to provide adequate warning or instructions as to how to safely use the product.
Commercial Property InsuranceWhat is covered under business property insurance? General liability policies don't cover damages to your business property. That's what commercial property insurance is for. It protects all of the physical parts of your business: your building, your inventory, and your equipment, giving you the funds you need to replace them in the event of a disaster. If you work from home, you might consider a Home Based Business Insurance policy instead.
Business Owners Policy (BOP)What is covered under a business owners policy (BOP)? This is a policy designed for small, low-risk businesses. It simplifies the basic insurance purchase process by combining general liability policies with business income and commercial property insurance.
Commercial Auto InsuranceWhat is covered under business auto insurance? This type of insurance covers automobiles being used for business purposes. This could include a fleet of business-only vehicles or a single company car. In some cases it might cover your car or your employee's car while they're being used for business. These policies have much higher limits, ensuring you can cover your costs if one of these vehicles gets into an accident.
Commercial Umbrella PoliciesWhat is covered under commercial umbrella insurance? This type of policy is a sort of "gap" insurance. It covers your liability in the event that a court verdict or settlement exceeds your general liability policy limits.
Liquor Liability InsuranceWhat is covered under liquor liability insurance? It covers bodily injury or property damage caused by an intoxicated person who was served liquor by the policy holder.
Professional Liability (Errors & Omissions)What is covered under professional liability insurance? This type of business insurance is also known as malpractice oe E&O. It covers the damages that can arise from major mistakes, especially in high-stakes professions where mistakes can be devastating.
Surety BondWhat is covered under surety bonds? Bonding is a contract where one party, the SURETY (who assures the obligee that the principal can perform the task), guarantees the performance of certain obligations of a second party, the PRINCIPAL (the contractor or business who will perform the contractual obligation), to a third party, the OBLIGEE (the project owner who is the recipient of an obligation).


Who Needs General Liability Insurance? - Virtually every business. A single lawsuit or settlement could bankrupt your business five times over. You might also need this policy to win business. Many companies and government agencies won't do business with your company until you can produce proof that you've obtained one of these policies.

Business Insurance Required by Law
Small Business Commercial Insurance

If you have any employees most states will require you to carry worker's compensation and unemployment insurance. Some states require you to insure yourself even if you are the only employee working in the business.

Your insurance agent can help you check applicable state laws so you can bring your business into compliance.

Other Types Of Small Business Insurance

There are dozens of other, more specialized forms of small business insurance capable of covering specific problems and risks. These forms of insurance include:

  • Business Interruption Insurance
  • Commercial Flood Insurance
  • Contractor's Insurance
  • Cyber Liability
  • Data Breach
  • Directors and Officers
  • Employment Practices Liability
  • Environmental or Pollution Liability
  • Management Liability
  • Sexual Misconduct Liability

Whether you need any or all of these policies will depend on the results of your risk assessment. For example, you probably don't need an environmental or pollution policy if you're running an IT company out of a leased office, but you would need data breach and cyber liability policies to fully protect your business.

Also learn about small business insurance requirements for general liability, business property, commercial auto & workers compensation including small business commercial insurance costs. Call us (855) 767-7828.

Additional Resources For Manufacturing Insurance

Learn all about manufacturing insurance. Manufacturers face many unique risks such as product libility and/or product recall exposures due to the nature of their business operations.


Manufacturing Insurance

For manufacturers, having the proper coverage is very important. You will need Products/Completed Operations Liability Coverage to protect you against injuries or property damage cause my the products you make or sell.

Manufacturing is an extremely broad category that includes countless potential hazards and exposures in virtually all coverage areas. Because of this, every individual manufacturer is unique and a specific risk survey of every operation is advisable.

The basic insurance needs for every class of business or operation includes property coverage for buildings, machinery and equipment, as well as for raw stock and finished products.

Liability insurance for premises exposures is important but products liability insurance presents greater concerns so these exposures and coverage needs must be evaluated carefully.

In addition, protection for injuries to workers, environmental coverages and automobile insurance are priority items.

What does the insured does that could result in a covered loss? The insuring agreement only requires that the insured be legally obligated to pay damages for injury to others or damage to their property included within the products-completed operations hazard covered by the insurance.

Because of this, every product manufactured and completed operation exposure for each named insured must be determined, described and evaluated to be certain that each represents acceptable exposures, or are acceptable classes of business to the insurance company providing coverage.

Once the extent of all business activities and operations is determined, the process of identifying hazards begins. The first step in the process is completely listing and describing all current products being manufactured and projects being worked on.

The next step is obtaining the same information for discontinued products and completed projects for the past five to 10 years, depending on the products or projects involved. This should include an explanation of why the products were discontinued. If some completed projects were of a different type than those currently being worked on, an explanation is in order, including whether the insured may resume them in the future.

Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Equipment Breakdown, Employee Dishonesty, Accounts Receivable, Computers, Goods in Transit, Valuable Papers and Records, General Liability, Employee Benefits Liability, Environmental Impairment Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.

Other commercial insurance policies to consider: Earthquake, Flood, Cyber Liability, Employment-related Practices Liability, Business Auto Liability and Physical Damage and Stop Gap Liability.


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