Specialty Manufacturing Insurance

Specialty manufacturing insurance is a type of insurance that is specifically designed for manufacturers and their unique needs. This type of insurance covers a wide range of potential risks that manufacturers may face, including property damage, liability, and loss of income.

One of the key features of specialty manufacturing insurance is that it is tailored to the specific industry and type of manufacturing that a company is engaged in. For example, a company that manufactures medical devices will have different insurance needs than a company that manufactures automotive parts. Specialty manufacturing insurance can be customized to meet the specific needs of each individual company, ensuring that they are fully protected from any potential risks.

Another important aspect of specialty manufacturing insurance is that it covers not only the physical assets of a manufacturing facility, but also the intellectual property and proprietary processes that are used in the manufacturing process. This can include patents, trademarks, and other types of intellectual property, as well as the process and equipment used to manufacture the products. This type of coverage is essential for manufacturers, as it can protect them from costly lawsuits and other legal actions that may be taken against them.

Specialty manufacturing insurance also includes liability coverage, which can protect a company from any claims that may be made against them as a result of their products or processes. This can include product liability claims, as well as any accidents or injuries that may occur on the manufacturing facility. It also covers environmental liabilities, which can be especially important for manufacturers that work with hazardous materials.

Finally, specialty manufacturing insurance also includes coverage for loss of income, which can protect a company from any financial losses that may occur as a result of a disruption in their manufacturing operations. This can include losses that may occur due to equipment breakdowns, natural disasters, or other unexpected events.

Overall, specialty manufacturing insurance is an essential tool for manufacturers, as it can help protect them from a wide range of potential risks and liabilities. By customizing the coverage to meet the specific needs of each individual company, manufacturers can ensure that they are fully protected and able to continue their operations with minimal interruption.

Aircraft hull policies exclude aircraft spare parts. If a part, such as an engine, is removed from the aircraft to be repaired, and in order for the aircraft to be used, a loaner is attached to the aircraft, the part removed is not covered. Coverage for that spare part must be purchased separately from the aircraft hull policy. Insurance purchased covers aircraft engines, spare parts, and equipment that are on the ground, or that are being carried as cargo by air, land, or water conveyances. Coverage ends when the equipment is fitted to the aircraft. This coverage does not cover engine loss or damage while the part is running or being tested. It also excludes mechanical or electrical failure loss or damage to detached property once it is refitted to the aircraft or to property carried on the aircraft as a spare parts kit. Each loss that results from one event is adjusted separately.

Bicycle and bicycle parts manufacturers have significant product liability exposures which most standard markets will not write. In addition, bicycle wholesale and retail operations that import bicycles directly from foreign manufacturers are usually underwritten as manufacturers when that foreign manufacturer does not have a U.S. insurance policy.

Boat manufacturers' most difficult exposure is products liability. This coverage is usually written on a claims-made basis and in a specialty market. The property exposure is also significant because of the types of materials used and the flammable adhesives and paints that are required in the manufacturing process. Coverage for the stock may need to cover boats while on sale at dealerships.

Chemical manufacturers require significant liability insurance limits to protect them from lawsuits related to the hazardous nature of some of their products. In addition, there are significant environmental impairment exposures. Property and business income exposures are also challenging because of the caustic nature of various base elements and the explosive potential when they are combined. The workers compensation exposure can be very high and require extensive loss prevention activities and programs. Auto and inland marine exposures vary based on the way the chemical and base elements are transported.

Paints, coatings, and adhesives manufacturers are classes of business in the chemical industry that specialize in producing paints, inks, plastics, adhesives, aerosol containers, lubricants, and resins. Coverages available include general, products, and professional liability, pollution and remediation liability, auto liability, umbrella liability, and workers compensation. Distributors that handle these commodities are also eligible.

Insurance coverage for general liability, including products and vendors as additional insured liability, is available for cosmetics manufacturers. The products liability exposure is particularly hazardous due to the potential harmful effects of cosmetics on the skin and in the eyes. There is a significant property and business income exposure based on the types of cosmetics manufactured. Many of the base chemicals used in manufacturing are caustic and explosive.

Durable Medical Equipment (DME) is equipment to aid a medical condition that patients can use multiple times. Examples are wheelchairs, walkers, crutches, oxygen equipment, canes, patient lifts and CPACs. The products exposure is extremely high because of the potential harm to any equipment-dependent patient if the product should fail.

Explosion potential is the catastrophic hazard for fertilizer manufacturers. Property, general liability, and workers compensation are the mandatory coverages. Excess/umbrella limits must be high enough to respond to property damage and bodily injury to the surrounding community if there is a major explosion. Automobile liability with high limits is also necessary if the manufacturer transports product.

Tight market conditions occasionally create a need for a special market for foundries. The intense heat used in the casting process creates hazards that many standard insurers find unacceptable. In addition, many underwriters see relatively few risks in this class and conclude that they are more hazardous than they actually are. Other than the fire hazard, workers compensation has a high frequency of losses due to exposure to silicosis and other occupational diseases. There is a products liability exposure due to the products cast in a foundry being used in automobiles, locomotives, aircraft, or heavy machinery and equipment.

A medical device is any type of item that is used to aid patients that are not pharmaceutical. Many of the devices require FDA approval but others are over the counter items with sometimes questionable claims of efficacy. A tongue depressor is a medical device as is a pacemaker. Items can be external or inserted inside the body. Durable Medical Equipment (DME) is a defined subset of this category.

A medical marijuana dispensary must have a marijuana crop to sell. This unique crop is subject to the same hazards as any other crop in the specific area where it grows. This crop's potential value adds a significant theft exposure. The crops' value varies because some growers provide a generic crop while others use research and development techniques to produce disease- or symptom-specific crops.

Many motorcycle purchasers want a unique product. As a result many businesses cater to those clients who want custom paint schemes, special detailing, and even frame and engine modifications. Custom motorcycle designers, manufacturers, fabricators, service and repair shops, and parts dealers are some of the classes of business affected. Coverages provided include general liability, products and completed operations, garagekeepers legal liability, and business personal property coverage, including theft.

Nanomaterials are extremely small units of material. They are used in various industries including health-related and many other industries. One benefit of such very small units is that they can be directed and designed for specific purposes. One of the safety issues is that due to the very small size units can escape labs resulting in potential environmental issues. The other issues deal with it being a new type of product with a limited track record in which to access side effects and other potential problems.

Health foods are becoming increasingly popular as the nation grows more concerned about potential problems with foods grown using a variety of pesticides, herbicides, and other chemical compounds. In addition, foods preserved with chemicals are thought to be (or may be) linked to cancer. Property and casualty insurance programs, including important products liability coverage with high limits, are available to manufacturers, distributors, wholesalers, and retailers involved with a wide range of health products, including natural foods, organic foods, food supplements, and personal care products.

It can be difficult to place commercial general liability and products liability coverage for paint, coatings, inks, and adhesive manufacturers. Like chemical manufacturers, these risks are more hazardous than most manufacturing operations due to exposures to toxic substances and the potential of accidental emissions. Loss control is a very important service that should be provided.

These operations can be very large and generic or small and customized. All are labor intensive and involve significant workers compensation exposures from cuts, carpel tunnel, and disease. The slaughterhouse may own the meat it produces or others may own the meat and the slaughterhouse only processes it. Housekeeping, sanitation, and regularly testing the meat are primary underwriting considerations.

This coverage is primarily about satellites. As a rocket has multiple stages, so does the insurance. There is pre-launch, launch, and in-orbit coverage for physical damage to the satellite. There is also third party and re-launch guarantee coverage. Pre-launch insurance covers the satellite until it is launched. This includes transporting it from the manufacturer plus any storage or assembly at the launch site. Launch insurance covers the satellite for physical loss or damage during the launch sequence and also for the satellite failing to achieve its designated orbit. The launch stage also covers the satellite failing to perform as specified once it reaches orbit. In-orbit insurance is protection against the satellite failing to operate successfully when it achieves its required orbit. Third-party insurance protects the insured against third-party claims that arise from an occurrence associated with the mission including damage to various earth stations and transmission towers and equipment. Re-launch guarantee coverage provides a free re-launch to a customer when an error by the insured causes a launch failure.

Liability coverage for sporting goods and equipment manufacturers is difficult to place. Lawsuits are high-valued and high profile because children and athletes are injured when equipment such as helmets, padding, exercise equipment, or bicycles fails. Coverage may be written on a combined commercial general liability and products/completed operations liability package or with products liability written separately.

The market for terrorism coverage changed dramatically on September 11, 2001. Coverage availability and pricing varies significantly, based on geographic location and type of industry.

There are many types of toy manufacturers, but all share the desire to produce a product that is engaging to their target audience. The underwriting of the exposure depends on the selected market segment. Every segment has its own difficult aspect mainly because what is the intended use of the product and method of play can be radically altered by the user.

Property coverage on woodworking and lumber risks is a problem because of the high potential for fire due to the extreme flammability of wood, wood scraps, and sawdust. The danger of explosion and total conflagration is correspondingly high. Adequate safeguards such as dust collection systems, fire cut-offs, and restrictions on the use of highly volatile lacquers and paints by some operations make such risks much more appealing. Even with these and other protective safeguards, many woodworking and lumber risks are still written in specialty markets. The broad classification of lumber risks encompasses all activities connected with this industry, from logging trees in the forest to operations that process crude logs into finished boards, paneling, or pulp.

Following are some examples of Specialty Manufacturing Insurance claims and the corresponding insurance coverages that can help pay for them:

1. Product Liability Claim: Imagine a situation where a product manufactured by a specialty manufacturing company malfunctions and causes injury to a customer. The customer files a lawsuit against the company. In this case, the Specialty Manufacturing Insurance, which includes product liability coverage, will step in to help the company pay for legal expenses, court fees, and any settlements or damages awarded to the customer.

2. Workers' Compensation Claim: If a worker gets injured while operating a machine in the manufacturing unit, they might file a claim for their medical bills and lost wages. The workers' compensation part of the Specialty Manufacturing Insurance would cover these costs, ensuring the company doesn't have to pay out of its own pocket for these expenses.

3. Equipment Breakdown Claim: In a scenario where a key piece of manufacturing equipment breaks down due to a covered reason such as a power surge or mechanical failure, the business interruption coverage under the Specialty Manufacturing Insurance can help. It compensates for the lost income during the time the machinery is being repaired or replaced, thus mitigating the financial impact on the business.

4. Property Damage Claim: Suppose there's an incident, like a fire or natural disaster, that severely damages the manufacturing facility. The property coverage component of the Specialty Manufacturing Insurance would help pay for the repair or rebuilding costs, allowing the company to recover more quickly from such a setback.

5. Supply Chain Interruption Claim: If a key supplier is unable to deliver necessary components due to an unforeseen event such as a natural disaster or political unrest, this can disrupt the manufacturing process. The Specialty Manufacturing Insurance can help by covering the additional costs of sourcing the materials from elsewhere, or the loss of income due to the disruption, helping the company navigate this challenging situation.

6. Environmental Liability Claim: If a manufacturing company inadvertently contaminates the local environment due to a chemical spill, they may face a lawsuit from local authorities or affected parties. An environmental liability coverage in the Specialty Manufacturing Insurance would cover the cleanup costs, legal fees, and any fines or settlements related to the incident.

7. Cyber Liability Claim: In the event of a cyber attack where sensitive data is compromised, the company could face lawsuits from parties whose information was stolen. Cyber liability coverage under the Specialty Manufacturing Insurance can help cover the costs of legal defense, settlements, and other related costs arising from such a breach.