If you run a manufacturing business in the Greater Toronto area you have a lot of different risk factors to consider. In fact, manufacturers insurance can be a difficult business decision because you need to keep your costs down and still cover all your risks. However, it’s never a good idea to scrimp on insurance and here is an example why.
Paul wanted to build a better mouse trap and he put a lot of time and effort into designing the perfect trap. It worked on electricity and once the mouse entered the unit, it was humanely electrocuted. There were many other electronic rodent traps on the market, but Paul’s was different. His product would also take care of rats, and the price was very reasonable. By cutting costs on the high voltage transformer and making other changes, he was able to offer a trap for significantly less money than the competition.
As soon as Paul was able to get a business loan, he bought a small facility just outside of Toronto for his manufacturing plant. He started out small, and soon his trap became very popular.
Before long, Paul expanded his operation and when he told his insurance agent, the agent advised Paul to increase his manufacturing insurance and raise all his liability coverage. Paul wanted to keep his operating costs down but his agent was an experienced risk management professional, and Paul trusted him. He decided to spend the extra money on product liability insurance. This turned out to be an excellent business decision.
Five months later, Paul’s company started getting claims of defective traps. One of his transformer suppliers sent him units made with smaller wiring and some of them overheated in customer’s homes, resulting in fires. The claims totalled several million dollars, and had Paul not raised his product liability coverage, he would have been financially devastated. Instead, his insurance company paid the claims and soon things returned to normal.
What is Manufacturers Insurance?
Manufacturer’s coverage is specifically designed to meet risk factors of the 21st Century manufacturing company. It should include all the things that can go wrong, and offer fair compensation for them.
Who Needs to Have Manufacturer Insurance?
Do you run a factory or produce goods for sale or production? Whether you produce raw materials or simply assemble products, you need to have the right kind of insurance coverage in place. This includes the following businesses:
- Apparel manufacturers
- Plastic fabrication services
- Candy making factories
- Canned goods companies
- Machine shop services
- Tool and die makers
- Robotics manufacturers
- Milling services
- Product distributors
- Mattress manufacturers
- Warehouse and distribution companies
- Print services
- Furniture manufacturers
- Cabinet makers
- Publishing companies
Typical Manufacturing Insurance Coverage
You may not find “standard policies” for manufacturers, but these coverage options are usually considered to be essential:
- General liability insurance – covers injury and damage claims, like slips and fall incidents.
- Business property insurance – protects the building, outbuildings, roof, and building exterior.
- Contents – covers things inside your building and is important if you lease or rent your facility.
Manufacturers Insurance Options
When you check out insurance coverage for your business, talk to someone with experience and training in risk management. This person may recommend the following coverage options:
- Commercial auto insurance – your business vehicles need special insurance coverage.
- Inland marine insurance – this is not included in standard commercial vehicle insurance and it covers damage to products and equipment while they are in transit.
- Earthquake insurance
- Warehouseman’s legal liability insurance
- Sewer backup coverage
- Product liability – what would you do if one of your products was faulty due to design flaws or improper assembly? This insurance will pay for injury and damage claims related to these matters.
- Business interruption insurance
- Flood insurance
- Equipment breakdown coverage
- Named peril hazard insurance -this covers only listed items in your policy.
- All peril coverage – pays for all types of hazards unless they are separately listed in the policy.
- Crime protection
- Umbrella liability
- Product recall coverage
How Can I Be Sure I Have the Right Insurance?
Most business owners are good at running their businesses, but when it comes to managing risk factors, they need assistance. This is why many businesses in the Greater Toronto area are choosing independent insurance brokerages like Multi risk Insurance Brokers Ltd. We are independent insurance professionals and we work for you and not an insurance company.
Shopping for insurance can be time consuming and confusing with all the coverage terms and numbers. Your independent agent is there to translate insurance language for you and help you choose the perfect policy for your company. And when it comes to risk management, we can help you there too. When you make Multi risk Insurance Brokers part of your team, you have trained risk management professionals to help you with:
- Identifying and analyzing loss exposures
- Examining risk management plans
- Selecting the right risk management program
- Implementing your risk management plan
- Monitoring results
- Risk management program revision
Why spend all your time sifting through the maze of manufacturing insurance options when you can have a trained professional do this for you? For information on an insurance quote for your business, fill out our quote form and we’ll contact you. To call us for more information, simply pick up the phone and dial 416-224-2800.