Shoe Manufacturers Insurance Policy Information
Shoe Manufacturers Insurance. Across the globe, people put on leather, plastic, or rubber shoes on a daily basis and without much thought. The design and manufacture of footwear is, however, surprisingly complex.
Each component, including soles, insoles, midsoles, heels, and vamps has to be manufactured separately before being assembled into the end product - and very often, a different machine is used to produce each part of a shoe. Leather, plastic, rubber, foam, metal, and fabric are all common materials used in shoe making.
Leather shoe manufacturers receive processed animal hides from tanneries and produce shoes and boots whose uppers include leather. The soles may be made of leather, rubber or man-made materials such as plastics.
The process consists of designing the shoes or boots, cutting or punching the individual pieces, lacing or sewing the parts together, supplying trims or clasps, then attaching the uppers by adhesives to the soles.
The shoes may be treated or given a finishing coat, then packaged for shipment. Although some automation may be possible in the cutting process, sewing of individual items is often a labor-intensive process.
Non-leather shoe manufacturers produce shoes and boots having uppers made of fabric or a man-made material. The soles are made of vulcanized rubber or of plastic.
If made of rubber, raw latex is milled (chopped and mixed), combined with sulfur for vulcanization, and heated before being formed into soles by extrusion or molding. Plastics are heated and extruded or molded into soles.
Because of the varieties of materials and processes involved in production, the different phases of manufacture may be carried out in different locations or different countries.
Companies within this branch of industry can make sports shoes, dress shoes, sandals, and even flip flops. They may cater to luxury or budget markets, and can be successful whether they mass-produce footwear or craft shoes largely by hand.
One factor common to all shoe makers is that they face risks. Some of those may represent nothing more than minor setbacks, but other perils could potentially bankrupt a company.
What kinds of shoe manufacturers insurance might firms in this industry need to protect them against major threats? Read on to learn more.
Shoe 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 shoe manufacturing insurance questions:
- What Is Shoe Manufacturers Insurance?
- How Much Does Shoe Manufacturers Insurance Cost?
- Why Do Shoe Manufacturers Need Insurance?
- What Type Of Insurance Do Shoe Manufacturers Need?
- What Does Shoe Insurance Cover & Pay For?
What Is Shoe Manufacturers Insurance?
Shoe manufacturers insurance is a type of insurance policy specifically designed for companies involved in the production and sale of shoes. This insurance provides coverage for a wide range of risks and liabilities that shoe manufacturers may face, including property damage, product liability, workers' compensation, and more.
The goal of shoe manufacturers insurance is to protect the company and its assets, as well as provide financial security for its employees and customers in case of an accident or other unexpected event.
How Much Does Shoe Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small shoe manufacturing businesses ranges from $57 to $79 per month based on location, size, revenue, claims history and more.
Why Do Shoe Manufacturers Need Insurance?
Any number of perils could strike your company, often with little to no warning. Property loss or damage and liability claims are the two major threats any business may come face to face with, and shoe manufacturers are no exception.
Unless you are properly insured, both could lead to such massive costs that you may be forced to close your business.
Acts of nature - which include, but are not limited to, earthquakes, wildfires, and severe storms - cannot be prevented. They may seriously damage your manufacturing facility and all the physical assets inside it, while at the same time causing loss of revenue by forcing you to interrupt production.
Human acts like vandalism, including the intentional setting of fires, or theft can have equally devastating consequences. Manufacturing equipment you depend on can break down and require repair or replacement at any time.
Liability claims can arise if an employee of yours were to suffer a work-related injury or accident, or if a third party attending your premises got injured while there.
If byproducts were to cause environmental spills or leaks, a shoe manufacturer may likewise face liability claims, and the same can happen if an employee accidentally damaged someone's property while making a delivery.
Risks can be managed and mitigated, but they can never be fully prevented. For this reason, it is important to have a backup plan in the form of adequate commercial insurance coverage. The right shoe manufacturers insurance may, if something goes wrong, make the difference between continued success and bankruptcy.
What Type Of Insurance Do Shoe Manufacturers Need?
As a shoe manufacturer, your company will need to carry several different types of insurance. The exact types of coverage that will best shield you from financial loss depend on factors that include the materials you use to make shoes (leather, plastic, rubber, and others), the location of your manufacturing facility, and your number of workers.
Although a commercial insurance agent who understand your field is best suited to advise you on your unique needs, some forms of shoe manufacturers insurance are vital to any operation. They include:
- Commercial Property: This vital type of insurance is designed to protect your company from financial losses in the event that your manufacturing facility is subject to unforeseen circumstances like theft, vandalism, and most acts of nature. Flood coverage is frequently not provided, and may need to be purchased separately.
- Commercial General Liability: In case a third party becomes injured within your facility, or your company causes property damage to someone else, this general type of liability insurance helps cover the resulting legal fees. Because each policy varies, it is essential to check the extent of the coverage.
- Product Liability: This kind of shoe manufacturers insurance covers liability claims pertaining to your products, in this case shoes. Should poor wording on the part of your marketing team lead consumers to believe your shoes will function in circumstances they are not designed for, this kind of insurance can cover resulting legal costs. It may also cover instances in which recalls are required.
- Workers' Compensation: Required for almost any company, this type of insurance has your back if an employee suffers a workplace injury. The medical costs will be reimbursed by this type of insurance, but also any wages they lose to related work absences.
These types of shoe manufacturers insurance coverage are indispensable to any manufacturing operation, but companies that make shoes are advised to partner with a commercial insurance agent to find out whether they also need additional forms of insurance, such as business interruption and commercial auto insurance.
Shoe Manufacturing's Risks & Exposures
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 processing may be corrosive and/or toxic.
Fumes, spills or leaks may cause serious injury or property damage to neighboring premises. In the event of a fire, the difficulty in extinguishing it could result in smoke damage to neighboring property. Evacuation plans should be on file with the fire department.
Products liability exposure is normally moderate. The shoe may slip and contribute to slip and fall, which may cause sprains, strains, and fractures. The exposure increases if the manufacturer produces shoes based on prescriptions from podiatrists or other types of made-to-order or one-of-a-kind footwear.
Environmental impairment exposure is high due to possible contamination of ground, air and water from raw chemicals in the rubber or plastics, plus the actual processing and the final products. The catalysts may be caustic, and the final product is usually not biodegradable. Disposal procedures must adhere to all EPA and other regulatory standards.
Workers compensation exposure can be moderate to high. Injuries from production machinery are common, as are puncture wounds, burns, cuts, slips, trips, falls, foreign objects in the eye, hearing loss from machinery noise, and back injuries from lifting. 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.
Flammable liquids and chemicals used for vulcanization or finishing can cause skin irritation, eye irritation and possible long-term occupational disease. 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. If there is a fire on premises, the fumes in the smoke are very dangerous and can cause severe respiratory distress. Dense smoke makes egress from the premises difficult.
Safety consciousness and commitment of management, especially in the form of ongoing enforcement and awareness programs, are important considerations. A large amount of the piece work may be done by individuals whose status (employee or independent contractor) must be clear.
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. Cutting, punching, and buffing operations generate dust which can catch on fire. This hazard increases in the absence of well maintained dust collection systems. Loose fibers and scraps from processing are combustible and will add to the fire load.
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 machinery) can cause a fire without a separate ignition source. Fire hazards are generally high due to the vulcanization chemicals and processes. If the stock catches fire, it can be very difficult to extinguish due to the heavy black smoke which results in a great deal of smoke damage.
Machinery needs proper maintenance to prevent overheating and wear. Fuel sources to run machinery and the heat plant must be adequately controlled. High-valued items may be subject to 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. 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), 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. Because of the high market value of some shoes and boots, vehicles should be locked, fitted with alarms, and not left unattended once loaded or during transport.
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.
What Does Shoe Insurance Cover & Pay For?
Shoe manufacturers, like other businesses, can face various types of lawsuits. Each type of legal challenge may require different kinds of insurance coverage. Here are a few examples:
1. Product Liability: Shoe manufacturers can be sued if their product causes injury or harm to a customer. For instance, a shoe might have a manufacturing defect that leads to a severe foot injury. To protect against such lawsuits, manufacturers can take out Product Liability Insurance. This type of insurance covers the cost of legal defense and any settlements or awards resulting from the lawsuit. It can help manufacturers pay for medical costs, economic damage, and in some cases, punitive damages.
2. Intellectual Property Infringement: Shoe manufacturers may face lawsuits if they are accused of copying designs, logos, or other intellectual property from another company. In such cases, Intellectual Property Insurance can come in handy. It can cover the cost of legal defense, as well as any settlements or damages awarded if the manufacturer is found guilty of infringement. This type of insurance helps manufacturers manage the financial risk associated with these types of lawsuits.
3. Employment Practices Liability: If a shoe manufacturer is sued by an employee for reasons like discrimination, harassment, wrongful termination, etc., Employment Practices Liability Insurance (EPLI) can help. EPLI covers the cost of defending against these types of lawsuits and any settlements or judgments that may result. This insurance provides a financial safety net for companies facing employment-related lawsuits.
4. Workers' Compensation: If an employee gets injured while working, the shoe manufacturer could be sued for damages. Workers' Compensation Insurance covers the cost of medical treatments and disability benefits for the injured worker, and also provides a portion of the lost wages. It also offers employers liability coverage, which can help cover the costs if an employer is sued over the injury. This insurance is vital for manufacturers as it protects both the employees and the company.
5. Commercial General Liability (CGL): CGL insurance is a must-have for any business, including shoe manufacturers. It covers claims of bodily injury, property damage, and personal and advertising injury (like slander or false advertising). If a customer slips and falls in a store or a manufacturer's advertisement is accused of misleading consumers, CGL can cover legal defense costs and any resulting settlements or damages.
In summary, various forms of insurance can help shoe manufacturers mitigate the financial risks associated with potential lawsuits. It's critical for manufacturers to work with experienced insurance brokers to ensure they have adequate coverage for their specific risk profile.
Commercial Insurance And Business Industry Classification
- SIC CODE: 3021 Rubber And Plastics Footwear, 3131 Boot And Shoe Cut Stock And Findings, 3142 House Slippers, 3143 Men's Footwear, Except Athletic, 3144 Women's Footwear, Except Athletic, 3149 Footwear, Except Rubber, Not Elsewhere Classified
- NAICS CODE: 316210 Footwear Manufacturing
- Suggested Workers Compensation Code(s): 2651 Shoe Stock Manufacturing, 2660 Shoe or Boot Manufacturing NOC, 4410 Boot or Shoe Manufacturing - Rubber
Description for 3021: Rubber And Plastics Footwear
Division D: Manufacturing | Major Group 30: Rubber And Miscellaneous Plastics Products | Industry Group 302: Rubber And Plastics Footwear
3021 Rubber And Plastics Footwear: Establishments primarily engaged in manufacturing fabric upper footwear having rubber or plastics soles vulcanized, injection molded, or cemented to the uppers, and rubber and plastics protective footwear. Establishments primarily engaged in manufacturing rubber, composition, and fiber heels, soles, soling strips, and related shoe making and repairing materials are classified in Industry 3069; those manufacturing plastics soles and soling strips are classified in Industry 3089; and those manufacturing other footwear of rubber or plastics are classified in Industry Group 314.
- Arctics, rubber or rubber soled fabric
- Boots, plastics
- Boots, rubber or rubber soled fabric
- Canvas shoes, rubber soled
- Footholds, rubber
- Footwear, rubber or rubber soled fabric
- Gaiters, rubber or rubber soled fabric
- Galoshes, plastics
- Galoshes, rubber or rubber soled fabric
- Overshoes, plastics
- Overshoes, rubber or rubber soled fabric
- Pacs, rubber or rubber soled fabric
- Sandals, rubber
- Shoes, plastics soles molded to fabric uppers
- Shoes, rubber or rubber soled fabric uppers
- Shower sandals or slippers, rubber
Description for 3131: Boot And Shoe Cut Stock And Findings
Division D: Manufacturing | Major Group 31: Leather And Leather Products | Industry Group 313: Boot And Shoe Cut Stock And Findings
3131 Boot And Shoe Cut Stock And Findings: Establishments primarily engaged in manufacturing leather soles, inner soles, and other boot and shoe cut stock and findings. This industry also includes finished wood heels. Establishments primarily engaged in manufacturing heels, soling strips, and soles made of rubber, composition, plastics, and fiber are classified in Major Group 30.
- Bows, shoe
- Box toes, leather (shoe cut stock)
- Buckles, shoe
- Caps, heel and toe: leather or metal
- Clasps, shoe
- Counters (shoe cut stock)
- Cut stock for boots and shoes
- Findings, boot and shoe
- Heel caps, leather or metal
- Heel lifts leather
- Heels, boot and shoe: finished wood or leather
- Inner soles, leather
- Laces, boot and shoe: leather
- Leather welting
- Linings, boot and shoe: leather
- Ornaments, shoe
- Pegs, shoe
- Quarters (shoe cut stock)
- Rands (shoe cut stock)
- Shanks, shoe
- Shoe cut stock
- Shoe soles: except rubber, composition, plastics, and fiber
- Soles, boot and shoe: except rubber composition, plastics, and fiber
- Stays, shoe
- Taps, shoe regardless of material
- Tips, shoe regardless of material
- Toe caps, leather or metal
- Tongues, boot and shoe: leather
- Top lifts, boot and shoe
- Trimmings, shoe leather
- Uppers (shoe cut stock)
- Vamps, leather
- Wood heel blocks, for sale as such
- Wood heels, finished (shoe findings)
Description for 3142: House Slippers
Division D: Manufacturing | Major Group 31: Leather And Leather Products | Industry Group 314: Footwear, Except Rubber
3142 House Slippers: Establishments primarily engaged in manufacturing house slippers of leather or other materials.
- House slippers
- Slipper socks, made from purchased socks
Description for 3143: Men's Footwear, Except Athletic
Division D: Manufacturing | Major Group 31: Leather And Leather Products | Industry Group 314: Footwear, Except Rubber
3143 Men's Footwear, Except Athletic: Establishments primarily engaged in the production of men's footwear designed primarily for dress, street, and work. Establishments primarily engaged in the production of such protective footwear as rubbers, rubber boots, storm shoes, galoshes, and other footwear with rubber soles vulcanized to the uppers are classified in Industry 3021. Establishments primarily engaged in the production of athletic shoes and youths' and boys' shoes are classified in Industry 3149, and those manufacturing orthopedic extension shoes are classified in Industry 3842.
- Boots, dress and casual: men's
- Casual shoes, men's except athletic and rubber footwear
- Dress shoes, men's
- Footwear, men's except house slippers, athletic, and vulcanized
- Footwear, men's leather or vinyl with molded or vulcanized soles
- Orthopedic shoes, men's except extension shoes
- Shoes, men's except house slippers, athletic, rubber, and extension
- Work shoes, men's
Description for 3144: Women's Footwear, Except Athletic
Division D: Manufacturing | Major Group 31: Leather And Leather Products | Industry Group 314: Footwear, Except Rubber
3144 Women's Footwear, Except Athletic: Establishments primarily engaged in the production of women's footwear designed primarily for dress, street, and work. Establishments primarily engaged in the production of athletic shoes and misses', children's, infants', and babies' footwear are classified in Industry 3149. Establishments primarily engaged in the production of rubber or plastics footwear are classified in Industry 3021, and those manufacturing orthopedic extension shoes are classified in Industry 3842.
- Boots: women's canvas and leather except athletic
- Footwear, women's except house slippers, athletic, and vulcanized
- Footwear, women's leather or vinyl with molded or vulcanized soles
- Orthopedic shoes, women's: except extension shoes
- Shoes, women's except house slippers, athletic, and rubber footwear
Description for 3149: Footwear, Except Rubber, Not Elsewhere Classified
3149 Footwear, Except Rubber, Not Elsewhere Classified: Establishments primarily engaged in the production of shoes, not elsewhere classified, such as misses', youths', boys', children's, and infants' footwear and athletic footwear. Establishments primarily engaged in the production of rubber or plastics footwear are classified in Industry 3021, and those manufacturing orthopedic extension shoes are classified in Industry 3842.
- Athletic shoes, except rubber
- Ballet slippers
- Footwear, children's: house slippers and vulcanized rubber footwear
- Footwear, children's: leather or vinyl with molded or vulcanized
- Orthopedic shoes, children's: except extension shoes
- Sandals, children's: except rubber
- Shoe dyeing for the trade
Shoe Manufacturers Insurance - The Bottom Line
Shoe manufacturers insurance policies can be very different in coverage, premiums and exclusions. To discover if your shoe 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.
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.
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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.