Tire Manufacturers Insurance Policy Information
Tire Manufacturers Insurance. The manufacture of tires is a much more complex and multifaceted process than people outside of this industry might imagine, and numerous different raw materials are used to make tires. Various kinds of rubber, silica, oils, pigments, carbon black, and antioxidants form the foundation of the tires, while polyester and steel components are also used.
Tire manufacturers produce rubber tires that are mounted on the wheels of aircraft landing gear, baby carriages, bicycles, shopping carts, wheelchairs, and most types of land motor vehicles, including automobiles, buses, construction equipment, farm tractors, forklifts, motorcycles, and trucks.
Materials used include natural or synthetic rubber, natural or synthetic fabric, additives such as carbon black, oils, or curing accelerators, and steel cable. Bales of natural latex are chopped and mixed with additives, especially sulfur or peroxide for vulcanization, then heated, pressed through rollers, and formed into tire components.
The main components and structure of a tire are the inner liner of sheet rubber, body layers or plies made of polyester cord, Kevlar, or similar fabric, steel belts, rubber sidewall, and tread.
After assembly, the tire is heated to complete the vulcanization process. The number of layers and the types of materials are determined by the tires end usage.
Equipment including banbury mixers, vulcanizers, and presses is essential in the manufacture of tires. A thorough quality assurance testing procedure is also part of today's tire industry, and x-ray machines are employed during the process.
Companies that manufacture tires of various types and intended for a wide range of different vehicles operate in a highly profitable industry, but like commercial ventures in all other fields, they are also exposed to a number of risks on a daily basis.
To protect their financial health, investing in tire manufacturers insurance coverage is essential - but what kinds of insurance might be needed? To discover more, keep reading.
Tire manufacturers insurance protects your manufacturing business from lawsuits with rates as low as $97/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked tire manufacturing insurance questions:
- What Is Tire Manufacturers Insurance?
- How Much Does Tire Manufacturers Insurance Cost?
- Why Do Tire Manufacturers Need Insurance?
- What Type Of Insurance Do Tire Manufacturers Need?
- What Does Tire Manufacturers Insurance Cover & Pay For?
What Is Tire Manufacturers Insurance?
Tire Manufacturers Insurance is a type of liability insurance that is specifically designed to protect tire manufacturers from financial losses due to lawsuits or claims arising from their products.
This insurance covers the cost of defending against legal action and paying damages if a manufacturer is found liable for damages caused by a defective tire. It may also cover the cost of product recalls and any costs associated with fixing the problem.
This type of insurance is crucial for tire manufacturers to have in order to protect their financial stability and reputation in the event of a product liability claim.
How Much Does Tire Manufacturers Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small tire manufacturing businesses ranges from $97 to $149 per month based on location, size, revenue, claims history and more.
Why Do Tire Manufacturers Need Insurance?
Investing in top-quality commercial insurance may, at first glance, appear to be a financial burden. You are, after all, protecting yourself against risks that may never materialize.
As a tire manufacturer, you have to be aware that any of the threats - those universal to any business owner as well as those unique to companies producing tires - could result in financial losses of a catastrophic magnitude.
Should your manufacturing facility be struck by an act of nature such as a wildfire or a flood, you will be grateful to have your insurance coverage on your side. The same holds true for theft or vandalism, which could cause significant damage to your production facility.
Likewise, the possibility that a manufacturing malfunction, or even, for instance, poorly-worded instruction manuals that result in misleading ideas about the circumstances in which particular tires can be used, might lead to accidents and injuries on the part of end users.
A costly lawsuit is then bound to follow. Occupational hazard for workers in the tire industry is another threat to consider; tire and rubber workers have an increased risk of certain cancers, for example.
When circumstances beyond your control do arise, the right tire manufacturers insurance will protect your company's financial health. This is why it is so important to consider your needs carefully.
What Type Of Insurance Do Tire Manufacturers Need?
The types of insurance your company is required to carry, alongside non-compulsory insurance that will benefit your business, will vary not just from one industry to the next, but also from one company to another.
Discuss the size, location, and number of workers as well as the raw materials you work with and the equipment used in your production line with a competent commercial insurance agent, who will be able to help you make the insurance plan that protects your financial interests.
Among the types of tire manufacturers insurance needed are:
- Commercial Property: Your physical building and assets on your property, ranging from manufacturing equipment to raw materials and inventory, are covered in the event of perils such as theft, vandalism, and acts of nature under this type of insurance. Furthermore, commercial property insurance can help you recover faster by partially compensating you for revenue lost due to these circumstances.
- General Liability: This type of tire manufacturers insurance protects you, succinctly said, against financial losses resulting from accidents that cause bodily injury or property damage to third parties, and for which you could be held legally responsible. Should a lawsuit be filed, it helps cover legal fees as well as settlement costs.
- Product Liability: Product defects sometimes have the potential to lead to serious physical harm or property damage, and that is certainly true for tires. Should anybody suffer injuries after road traffic accidents associated with a production error on your part, product liability insurance helps cover the financial fallout. It can also protect against economic loss if a product has to be recalled due to manufacturing errors or problems with raw materials.
- Workers' Compensation: This kind of insurance protects both you and your employees; should a worker sustain workplace injury or suffer occupational illness, it compensates for medical costs and lost wages that may arise.
These essential kinds of insurance are examples of the needs of firms in this industry. You may also need to carry additional kinds of insurance, such as vehicle insurance and inland marine insurance.
To learn what tire manufacturers insurance plan will protect your company from the many perils it faces, partner with a commercial insurance agent, who can also help you find the best deal.
Tire Manufacturing's Risks & Exposures
Premises liability exposure at the plant is normally low as access by visitors is limited. If tours are given or if outsiders are allowed on premises, visitors may be injured by slips, trips, or falls. Chemicals used in vulcanization may be corrosive and/or toxic.
Fumes, dust, and noise from production could affect neighbors. Should a fire occur, the difficulty in extinguishing it could result in the release of toxins and smoke damage to neighboring properties.
Evacuation plans should be on file with the fire department. Road testing and the storage of raw materials or finished tires outdoors can produce attractive nuisance hazards.
Products liability exposure is high because the failure or bursting of a tire on any type of aircraft or motorized vehicle can cause serious bodily injury and property damage. A tire may fail to perform under warranted conditions or be the proximate cause in a vehicular accident.
A quality control procedure should be in place with inspections done throughout the manufacturing process. Governmental regulations, guidelines, and standards must be observed. Warning labels and warranties are important but provide only limited defense as courts may apply strict liability standards to tire failure.
Environmental impairment exposure is high due to possible contamination of ground, air, and water from raw chemicals, solvents, and fuels. 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 exposures are high. Injuries from production machinery are common, as are minor cuts, puncture wounds, burns, slips, trips, falls, foreign objects in the eye, back injuries from lifting, hearing loss from noise, and repetitive motion losses.
More serious hazards come from chemical usage that can cause injury to eyes, skin, and lungs, as well as from work with heavy machinery that can cause major cuts and amputations. Employees should be provided with safety training and protective equipment. Workstations should be ergonomically designed.
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.
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. Ventilation systems are needed to prevent the buildup of toxic vapors. Test drivers could be seriously injured in automobile accidents should a tire fail.
Property exposures consist of an office, production plant, and a warehouse or yard for raw materials and finished goods. Ignition sources include electrical wiring, heating systems, production machinery, and the storage of large amounts of chemicals and solvents.
While rubber does not ignite easily, the vulcanization chemicals and process can result in a fire that can be very difficult to extinguish due to the heavy black smoke which results in a great deal of smoke damage. The chemicals must be adequately controlled, separated, and stored.
Nearly all aspects of the operation present fire hazards that can only be minimized by separation and fire suppression systems. Machinery needs proper maintenance to prevent overheating and wear. Fuel sources to run machinery and the heat plant must be adequately controlled.
Cutting, punching, and buffing operations generate dust which can catch on fire. This hazard increases in the absence of properly maintained dust collection systems. Poor housekeeping 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.
Equipment breakdown exposures include malfunctioning production equipment and 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 exposure comes from employee dishonesty and theft as finished items may be high in demand. 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. 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), goods in transit, and valuable papers and records for customers' and suppliers' information.
The main causes of loss are collision, upset, fire, or theft. There may be contractors' equipment such as forklifts or heavier equipment used to move raw materials and finished goods.
Commercial auto exposure is high if the manufacturer assumes responsibility for the transport of raw materials or finished products. If vulcanization chemicals are transported, potential contamination due to overturn or spillage is high. Hazards are substantially higher without proper controls, such as any required Hazardous Material licenses and spill containment procedures and equipment.
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 Tire Manufacturers Insurance Cover & Pay For?
Tire manufacturers can face lawsuits for various reasons. A few common reasons include product liability, personal injury, false advertising, and breach of warranty. The right insurance policy can help cover the financial burden of these lawsuits. Let's discuss each in detail:
Product Liability: This is perhaps the most common reason for lawsuits against tire manufacturers. If a tire is found to be defective and causes an accident, the manufacturer can be held responsible. This may include manufacturing defects, design defects, or failure to warn about potential risks. Product liability insurance can help protect manufacturers against these claims. If a lawsuit is filed alleging that a tire was defective and caused harm, this insurance would cover legal fees, court costs, and any settlements or judgments.
Personal Injury: If a tire failure leads to a personal injury, the injured party may sue the tire manufacturer. In addition to product liability insurance, a general liability insurance policy can also help cover costs related to personal injury claims. This policy typically includes coverage for both bodily injury and property damage. So, if a faulty tire results in injury and vehicle damage, the insurance could help pay for legal defense, settlements, and judgments.
False Advertising: If a tire manufacturer makes false or misleading claims about its products, it may be sued for false advertising. This could include overstating the safety, performance, or lifespan of its tires. Commercial general liability insurance often includes coverage for advertising injury, which can help pay for the costs of defending against false advertising claims, as well as any associated settlements or judgments.
Breach of Warranty: If a tire manufacturer does not uphold the terms of its warranty, a customer might file a lawsuit for breach of warranty. This might occur if a manufacturer refuses to honor a warranty for a tire that failed prematurely. A professional liability insurance policy, also known as errors and omissions (E&O) insurance, can help protect manufacturers in such cases. E&O insurance covers claims related to mistakes or negligence in professional services, including failing to fulfill a warranty.
In conclusion, insurance plays a critical role in protecting tire manufacturers against a variety of legal claims. By ensuring they have the right coverage in place, manufacturers can focus on producing high-quality, safe products without the constant worry of potential lawsuits.
Commercial Insurance And Business Industry Classification
- SIC CODE: 3011 Tires And Inner Tubes
- NAICS CODE: 326211 Tire Manufacturing (except Retreading)
- Suggested Workers Compensation Code(s): 4420 Rubber Tire Manufacturing
Description for 3011: Tires And Inner Tubes
Division D: Manufacturing | Major Group 30: Rubber And Miscellaneous Plastics Products | Industry Group 301: Tires And Inner Tubes
3011 Tires And Inner Tubes: Establishments primarily engaged in manufacturing pneumatic casings, inner tubes, and solid and cushion tires for all types of vehicles, airplanes, farm equipment, and children's vehicles; tiring; camelback; and tire repair and retreading materials. Establishments primarily engaged in retreading tires are classified in services, Industry 7534.
- Camelback for tire retreading
- Inner tubes: airplane, automobile, bicycle, motorcycle, and tractor
- Pneumatic casings (rubber tires)
- Tire sundries and tire repair materials, rubber
- Tires, cushion or solid rubber
- Tiring, continuous lengths: rubber, with or without metal core
Tire Manufacturers Insurance - The Bottom Line
Not every tire manufacturers insurance policy is the same. In fact, they can vary in coverage, costs and exclusions. To discover if your tire 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.