Tennessee Manufacturing Insurance Policy Information
Manufacturing Insurance. 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.
Choosing the right type and level of Tennessee manufacturing insurance is important to your business' sustainability, profitability, and health. A combination of coverage keeps your business protected from all possible perils.
Tennessee manufacturing insurance protects your business from product liability lawsuits with rates as low as $57/mo. Get a fast quote and your certificate of insurance now.
What Type of Insurance Do Manufacturing Businesses Need?
TN manufacturers usually need more than one type of insurance policy to properly cover all of their needs. There usually isn't just one policy that will get the job done for them fully.
You likely have significant capital invested in your manufacturing business, and you must protect it with the right level and type of insurance. You must also protect your workers and the production capabilities of your business. There are generally three primary components that make up suitable Tennessee manufacturing insurance policies for manufacturers. These include:
- Product liability. Pays for the legal costs when a product you make injures someone or makes them ill.
- Product recall. Fills the gap caused by the CGL product recall exclusion. This insurance covers the expenses incurred by the insured when it conducts mandated and/or voluntary product recalls.
- Product contamination. Provides coverage when a product becomes contaminated or may become contaminated. The contamination can be due to an error or due to a criminal act. Coverage also applies when threats are received that contamination will occur unless ransom is paid. Costs that are covered include necessary inventory destruction, lost profits, business interruption, product recall and product rehabilitation. Crisis management, reputational advertising and more damage control measures are often covered too. However, there is no coverage for third-party products liability.
- Worker's compensation. Employers are required by TN state statute to provide coverage for on-the-job injuries sustained by their employees through either a workers compensation policy or a state-approved self-insurance plan. If the manufacturer uses independent contractors at off-site locations, they must verify that they actually qualify as subcontractors before an accident occurs. Otherwise, the injured party could be treated as an employee.
- Commercial auto. The commercial automobile exposures of manufacturers can vary tremendously. Some may have no exposures while others have only a salespersons' fleet. In other cases, a manufacturer may use a fleet of owned commercial trucks to deliver its finished products. The amount of international travel, if any, should be determined, due to territorial limits restrictions in the commercial auto policy, and due to restrictions, laws and regulations in a number of foreign countries.
Working with an commercial insurance broker who understands the unique nuances of TN manufacturers is important when choosing manufacturing business coverage types. A pro agent can access quotes and information from a variety of insurance companies, help you compare the policies available, and be instrumental in helping you choose the right type of coverage for your unique needs.
This allows you to get the right Tennessee manufacturing insurance policies at the right policy limits, keeping your premiums lower while ensuring your coverage remains high.
What Other Types Of Business Insurance Should Manufacturers Consider?
Covering the assets that your business owns with a Tennessee manufacturing insurance policy is important to your business' ongoing growth and overall financial health. If someone touring your TN facility becomes injured and files a claim against you, or if a fire guts your facility and leaves you without a place to manufacture your items, you need to be assured that your business can continue to operate.
In a similar vein, if a key piece of equipment becomes non-operational, you need to be ensured that the piece can be replaced without the need to shut down. Business insurance for manufacturers can be a godsend. Some essential Tennessee manufacturing insurance policy types include:
- Aviation. Larger manufacturers may own or lease aircraft and use them as a convenient way to visit their other plants and customers. In addition, some products may be transported and delivered by air cargo.
- Business Income. In the event of a work stoppage due to a covered peril, income loss coverage can help. It protects the business' building and its equipment if the loss prevents you from continuing your normal operating procedures. It can also combat lost income and operating expenses, generally for a fixed period of one year.
- Business Owner's Policy (BOP). This coverage combines general liability and commercial property along with business income and other coverages all in one package.
- Commercial Property. Output policies were designed for manufacturers as a way to close coverage gaps as raw material moved through the manufacturing processes and became finished stock. The same coverage may be achieved by combining the inland marine coverages with the building and business personal property coverage form, but the coverage is not as seamless, leaving the potential for a coverage gap. A number of valuation options are available that should be considered. Time element coverages are a vital component and the form and limits should be reviewed carefully. Business income from dependent and secondary dependent properties is an especially important coverage to be considered as companies utilize fewer and fewer suppliers and may supply fewer and fewer very large customers.
- Crime. Employee theft is the most important crime coverage needed by most manufacturers. Because of the way business is now transacted, computer fraud and funds transfer fraud are also major coverage and loss concerns. Forgery coverage should not be overlooked because checks are regularly written for large amounts. Money and securities are not usually subject to holdup losses but loss to or destruction of them is only covered under crime forms. Extortion, kidnap and ransom coverages should be seriously considered if international travel makes up part of the operation.
- Excess And Umbrella. The types of injuries that might occur because of a faulty manufactured product are the major issues in considering the appropriate higher limits and type of excess or umbrella policy to use. If the underlying coverage is written on a claims-made policy, retroactive excess liability coverage should be considered.
- General Liability. General liability coverage provides protection for accidents such as slips-and-falls or when a person in your facility is otherwise injured. It also covers property damage to third parties on your premises. It covers your legal costs and any judgement granted against you. Products liability is the major liability exposure for most manufacturers. The limitations within the CGL on products-related issues have prompted some new coverages that should be carefully reviewed with the customer. A liquor and alcoholic beverage manufacturer is wise to purchase a liquor liability policy because even limited liquor exposures are excluded in the CGL policy. If a manufacturer has a railroad sidetrack or spur on the premises, a railroad protective liability policy may be needed. When the CGL coverage form is moving from a claims-made basis to occurrence basis form then a claims-made to occurrence coverage form is vital in preventing a significant coverage gap.
- Inland Marine. Stock and other property is constantly on the move and must be covered wherever it is. Inland marine coverages are designed to follow that stock and other property. A thorough review of the manufacturing processes and operations helps determine potential coverage gaps and highlights the correct coverages needed in each situation. A transportation policy should always be written, even if the insured does not have a fleet and uses carriers for hire. Patterns and dies can be extremely valuable and are sometimes overlooked because they are located away from the insured's premises.
- Ocean Marine. Manufacturers that export products need to arrange for coverage through an ocean marine cargo policy on products shipped at their risk. In addition, if they ship to or through a war risk area, a separate cargo war risk policy should be purchased. Finally, some manufacturers own boats or yachts used to entertain both customers and employees.
- Surety Bonds. Bonding may be a major coverage concern for some manufacturers, especially if they enter into service or supply arrangements with governmental entities.
Remember, your exact Tennessee manufacturing insurance policy needs may depend on how you do your business and what you are making. Sit down with your insurance agent to discuss your current risks and exposures. These can depend on the specific types of goods you are manufacturing, where your business is located, your annual revenue, and more.
Tennessee Manufacturing Insurance - The Bottom Line
To find out more about the exact types of Tennessee manufacturing insurance policies you'll need, how much coverage your business needs - speak with an experienced insurance broker who understands the unique risks of manufacturers.
Tennessee Economic Data & Commercial Insurance Information
If you're a entrepreneur, you need more than just a great products and services and a well-established business model to be a success; you also need to choose the right location for your organization. No matter how awesome your ideas are, if your business isn't located in a place where what you offer will provide value to consumers, you're going to struggle to succeed.
Whether you're thinking about setting up the headquarters of your organization or you're planning on opening a branch of your company in Tennessee, familiarizing yourself with the economic trends and the requirements for commercial insurance in the state is crucial for your success. Below, we offer insights regarding job growth and insurance coverage requirements in The Volunteer State.
Economic Trends For Small Business In Tennessee
In regard to job growth, the state of Tennessee is exceeds the rate of national job growth. As of February 2020, unemployment rates were at a historic low in The Volunteer State, with a rate of 3.2% throughout the state; 0.1% lower than the last historic low of 3.3% in October of 2018. That's lower than the national unemployment rate, which was reported to be 3.8% in February of 2019. Economists are forecasting continued job growth throughout the state into 2020.
In addition to positive job growth, the state of Tennessee offers other favorable conditions for entrepreneurs. No personal income tax and more training and education opportunities for the workforce are just some of the factors that make The Volunteer State a great place for business owners of both established companies and startups. While the entire state offers favorable conditions for businesses, the eastern and middle areas are considered the best to start a business; this includes big cities like Nashville and Knoxville; however, cities throughout the state are also offering great opportunities for business operations, such as Chattanooga, Memphis, Pigeon Forge, Alcoa, Lebanon, and Crossville.
Industries that are thriving in Tennessee include:
- Information technology
- Technology, as a whole
Business Insurance Regulations & Limits In TN
The Tennessee Department of Commerce & Insurance regulates insurance in Tennessee. Just like any other state in the country, there are regulations in place regarding commercial insurance. Business owners are required to carry certain types of coverage to protect themselves, their clients, and their employees.
Small businesses with 5 or more employees are required by TN state law to have workers comp insurance coverage. That drops to 1 or more employees if they operate in the construction business or trades (construction service providers).
If you use certain types of motor vehicles for business-related purposes, you'll also need to invest in commercial auto insurance coverage to protect your drivers, as well as other drivers on the road.
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.
- Auto Parts
- Canned Fruit & Vegetables
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- Machine Shop
- Product Liability
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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