9 Types of Insurance For Manufacturers

Manufacturers are those who create items to be sold on the market. Just like many other businesses, they face a variety of risks at work or even after a job has been completed.

Aside from relying on expensive machinery to produce high-quality products at a fast rate, manufacturers also need to distribute their products across their supply chain.

This opens up an avenue for many unforeseen circumstances, including disruptions to business operations, claims that your service or product is subpar, or allegations that your item was never received by the customer. All of these situations could result in huge financial losses if you’re not careful.

To combat this, protecting yourself with an insurance policy that caters to your business’s needs is a must. But because manufacturing businesses encompass all kinds of industries, it’s hard to pinpoint the policy that will work for you without asking a reputable insurance provider for help.

Here at KASE Insurance, we’ve compiled the types of insurance for manufacturers that protect against the perils they face while at work.

Are you curious to know what they are? Keep on reading to find out!

Why Do Manufacturers Need Insurance?

Manufacturers in Canada need insurance for several reasons. First, it helps protect against financial losses and liabilities arising from risks associated with business operations. These risks include property damage, theft, product liability claims, environmental damage, business interruptions, cybersecurity threats, and employee injuries.

In some provinces, manufacturing businesses are also required by law to carry certain types of insurance. For example, workers' compensation insurance is mandatory in most Canadian territories, which means that manufacturers must provide coverage in case of workplace injuries or illnesses.

Insurance for Manufacturers

    1. Professional Liability Insurance

Professional liability insurance protects your business from claims of injury or damage caused by its products, services, or operations. This can include claims from customers, employees, or other third parties. Liability insurance may cover legal fees, settlements, and judgments up to the policy limit.

It encompasses various commonly used insurance policies, including general liability insurance, which covers costs if you’re held liable for third-party injuries or property damage due to the products you sell or services you provide.

    2. Workers’ Compensation Insurance

Manufacturing businesses are often labour-intensive environments, which means there is a higher risk of employee injuries. Workers’ compensation insurance covers medical fees and lost wages for employees who are still healing from their injuries.

In addition, this policy can help protect your business from lawsuits or legal expenses that may be incurred due to the accident.

    3. Product Liability Insurance

This type of insurance covers the manufacturer in case of lawsuits related to product defects or other product-related incidents. Product liability insurance also protects your business from the costs that occur after your product causes injury to consumers.

This can include coverage for legal fees, settlements, and judgments up to the policy limit. It can also help pay for the cost of product recalls or other product-related expenses.

    4. Business Interruption Insurance

Business interruption insurance covers the loss of income and other expenses that result from interference in the manufacturing process, such as a natural disaster or equipment failure.

Having this insurance ready is important to help you cover losses in case of emergencies, such as fires or bitter snow storms in Canada. These incidents almost always disrupt daily business operations, which causes manufacturers to lose a day’s worth of income.

Business interruption insurance can help manufacturers recover from unexpected events and maintain financial stability during a crisis.

    5. Cyber Liability Insurance

Everything is digital these days. This means that the threat of cybercriminals also increases the longer we’re online. Manufacturers face risks from cyber threats, including data breaches and other forms of cyberattacks.

Cyber insurance can help protect against these risks by providing coverage for costs related to data breaches, such as legal fees, notification costs, and credit monitoring.

    6. Environmental Liability Insurance

This type of insurance for manufacturers protects businesses that produce hazardous materials. Environmental liability insurance helps pay for costs related to losses or damages resulting from the release of pollutants—whether they were intentional or not.

As such, it covers potential pollution or contamination claims, cleanup costs, legal fees, and other expenses related to environmental damage caused by the manufacturing process.

    7. Property Insurance

This is a policy that’s necessary if your business has an office, a warehouse, a storage unit, or a storefront that you heavily rely on. It covers damage or loss to the physical property of your manufacturing business, including buildings, equipment, and inventory.

Specifically, property insurance can protect you against costs resulting from damage from fires, storms, vandalism, and other perils. Do note that coverage from losses from theft or equipment breakdown will depend on the policy.

    8. Errors & Omissions

This is another form of professional liability coverage that helps pay for legal costs or settlement fees in case a client alleges that your service was subpar or you were negligent in providing your service or product. It can also protect you from lawsuits alleging that you were neglectful at work or failed to deliver an item in the condition it was promised.

    9. Freight Forwarders Insurance

Rounding up our list of insurance for manufacturers, we have freight insurance. This provides protection against loss or damage to goods during shipping or transportation, and it can either be purchased as a standalone policy or added to an existing insurance policy.

Manufacturers often rely on freight carriers to transport their products to customers, exposing them to various risks during transit, including theft or damages incurred from natural disasters.

Get Started With KASE Insurance

Manufacturers face various risks and challenges every day at work. But the good news is you don’t have to fear them.

As the leading commercial insurance broker in Toronto, KASE Insurance prides itself on helping clients create risk-management strategies to secure their finances. Our customer service-oriented team of experts is always ready to provide comprehensive and tailor-fit packages to our clients, ensuring that they only pay for what their business really needs.

Ready to get started? Contact us today to learn more about insurance for manufacturers!