Textile Manufacturers Insurance Policy Information

Textile Manufacturers Insurance. The textile industry is a complex one that comprises a multitude of different aspects - from spinning and weaving, finishing fibers to dying, embroidery, and printing - either natural or synthetic.

The manufacture of garments and a wide range of other textile products, such as awnings, upholstery, fabric backpacks, and bedding can be considered the final stage in the process.

Within this colossal industry - valued, globally, at over 961 billion US dollars in 2019 - both small and large businesses can thrive. To be able to prosper, however, textile manufacturers have to be fully aware of the many perils that could devastate their financial health, as well as take the right steps to be fully insured against them.

Are you curious what types of textile manufacturers insurance are needed, or are you investigating your insurance requirements as you put together a business plan for a company you are hoping to start? This brief guide will point you in the right direction.

Textile 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 textile manufacturing insurance questions:

What Is Textile Manufacturers Insurance?
How Much Does Textile Manufacturers Insurance Cost?
Why Do Textile Manufacturers Need Insurance?
What Type Of Insurance Do Textile Manufacturers Need?
What Does Textile Manufacturers Insurance Cover & Pay For?

What Is Textile Manufacturers Insurance?

Textile manufacturers insurance is a type of insurance policy designed to protect textile manufacturing companies from financial loss due to unexpected events such as fire, theft, natural disasters, and liability claims.

This insurance covers the company's physical assets, such as machinery, buildings, and products, as well as protects against liability claims that may arise from the production process, such as product defects or workplace injuries. This type of insurance is important for textile manufacturers to secure their investments and ensure the continued success of their business.

How Much Does Textile Manufacturers Insurance Cost?

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

Why Do Textile Manufacturers Need Insurance?

Knowing that a company has the insurance coverage that could keep it safe should unforeseen circumstances threaten it offers peace of mind, allowing business owners and managers to focus on what they do best - running a smooth operation and working to expand their business.

The simple fact is, after all, that any commercial venture can be impacted by catastrophes, often without warning.

Acts of nature, which would include such disastrous events as earthquakes or hurricanes, but also smaller-scale wildfires or floods, could force you to stop production by severely damaging your facility. Vandalism and theft should also be on your radar.

Situations more specific to the textile industry would include workplace injury; in textile manufacture, workers are vulnerable to inhaling textile dust and chemicals, for example. Fires, which can be accidental as well as intentionally set or the result of negligence, are another serious threat in the textile industry.

These and many other risks cannot always be prevented - but business in this industry can do the next best thing, and prepare for them by investing in the right textile manufacturers insurance coverage.

What Type Of Insurance Do Textile Manufacturers Need?

Whether a company focuses on making athletic gear or produces curtains or any other finished textile product, some types of insurance are essential in protecting its financial health.

Other types of coverage may or may not be required, depending on the jurisdiction in which your manufacturing facility is based, the terrain, the equipment you use, and your number of workers, among other factors.

A commercial insurance agent who understands the textile industry can hep you build your ideal insurance coverage. However, the types of textile manufacturers insurance needed include:

Commercial Property: This essential kind of textile manufacturers insurance protects you from financial losses resulting from circumstances beyond your control, such as fires and theft. It covers your real estate as well as other physical assets, ranging from your inventory to your equipment.
General Liability: In the event that third parties sustain an injury on your premises, something that could result from an event as simple as a fall on a slippery floor, they may hold your company responsible. The same holds true if your activities cause damage to third party properties; for instance, if a fire in your facility spreads to a neighboring company. Legal expenses and settlement fees fall under general liability insurance for companies.
Workers Compensation: Required for nearly all companies, this kind of insurance covers your employees' medical expenses and lost wages while recovering, should they become injured in the workplace in circumstances for which the company is considered responsible.

Textile manufacturers that produce products that could potentially cause injury or property damage as a result of manufacturing errors or other harms for which the company might be held liable will further need product liability insurance. The manufacture of hammocks could be one example.

However, textile manufacturers should be aware that their insurance needs are as unique as their business, and you may well require additional forms of insurance, ranging from commercial auto to inland marine and even commercial umbrella insurance to cover situations that your regular insurance does not.

A competent commercial insurance agent can help you get the textile manufacturers insurance coverage that ultimately offers the best protection.

Textile Manufacturing's Risks & Exposures

Premises liability exposure is limited due to controlled access of 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.

Fire, fumes, spills or leaks may cause serious injury or property damage to neighboring premises.

Products liability exposure is low to moderate depending on the end use of the goods. If goods are used to produce infants' or children's wear, all standards of flammability must be met. Warranties for fire resistive, hypoallergenic, sterile, or waterproof items can result in losses if the products fail to perform.

Environmental impairment exposure is very high due to the use of corrosive and/or toxic chemicals during processing. 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 very high due to the chemicals used in coating and finishing fabrics and fibers. Many are toxic and special controls are needed. Skin and eye irritations are common, and continued exposure can result in 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, overheating and exhaustion in high temperatures, 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. 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.

Property exposures consist of an office, production plant, and warehouse for raw materials or 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.

Dust from some fabrics and from many coatings may present an explosion hazard. These hazards may be severe unless there are dust collection systems that are well maintained. Fabrics and coatings are often highly combustible, especially if poorly stored without adequate aisle space and shelving.

Some fabrics, such as silk, are subject to damage by water, moisture, or smoke. 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 cause a fire without a separate ignition source. Sprinklers may be advisable.

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 of expensive materials such as silk or designer brands. 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.

Commercial 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.

If the chemicals used to finish and coat fabrics are transported by the manufacturer in tanker trucks, drivers of these vehicles must have a Hazardous Material Endorsement on his or her Commercial Driver Licenses and be trained to contain spills.

What Does Textile Manufacturers Insurance Cover & Pay For?

Textile Manufacturers Insurance Claim Form

Textile manufacturers can face various lawsuits related to product liability, workplace injuries, intellectual property rights, and environmental damages, among others. In each case, having the appropriate insurance coverage can help manage the financial risks involved. Here are some examples:

1. Product Liability: If the textiles produced by a manufacturer cause harm to a consumer due to a defect, the manufacturer can be sued for product liability. For instance, if a consumer suffers an allergic reaction due to undisclosed materials in a garment, the manufacturer could face legal action. Product liability insurance can protect the manufacturer in such cases. This insurance covers the cost of legal defense, as well as any settlements or judgments resulting from the lawsuit.

2. Workplace Injuries: Textile manufacturing involves machinery that can cause accidents and injuries. If an employee is injured on the job, the manufacturer could be sued for damages. Workers' compensation insurance is designed to cover such risks. It provides benefits to injured workers for medical costs and a portion of their lost income, which can protect the employer from being sued for those costs.

3. Intellectual Property Rights: If a textile manufacturer is accused of infringing on another company's patent or design, they could be sued. Intellectual property insurance can cover the costs of defending against such lawsuits and any associated settlements or judgments. It can also help with the costs of enforcing the manufacturer's own intellectual property rights.

4. Environmental Damages: The textile industry uses chemicals and processes that can harm the environment. If a manufacturer is found to be responsible for environmental damage, they could face a lawsuit. Environmental liability insurance can cover the costs of such lawsuits, including legal defense, cleanup efforts, and any fines or settlements.

Insurance plays a crucial role in protecting textile manufacturers from the financial repercussions of lawsuits. However, it's important to remember that insurance is only one aspect of risk management. Ensuring safe practices, compliance with regulations, and proactive risk mitigation strategies should be a part of any comprehensive approach to managing business risk.