Manufacturing operations carry a distinctive and layered set of risks — from the product liability exposure created by goods entering the stream of commerce to the workers compensation exposure of industrial labor and the property risk of complex production equipment.
Product Liability for Manufacturers
Product Liability coverage is included under the Products and Completed Operations coverage in a Commercial General Liability policy. It protects manufacturers from claims alleging that a product they made, distributed, or sold caused bodily injury or property damage to a third party.
Key considerations for manufacturers:
- Products sold under your brand are your liability, even if manufactured by a third party
- Supply chain liability — if a component you sourced from a supplier fails and causes injury, your name on the product may make you the primary target
- Recall costs — standard GL policies do not cover product recall costs; a product recall endorsement or standalone policy is needed for businesses with recall exposure
Workers Compensation for Industrial Operations
Manufacturing workers face elevated injury risks — machine-related injuries, repetitive motion disorders, chemical exposure, and heavy lifting injuries are all common. Workers Comp is not just a legal requirement; it is one of the highest-cost insurance lines for manufacturers.
Managing your EMR through safety programs, return-to-work protocols, and proactive claims management is essential for controlling Workers Comp costs over time.
Equipment Breakdown Coverage
Standard property policies cover physical damage from covered perils — but they do not cover mechanical or electrical breakdown of machinery and equipment. Equipment Breakdown (also called Boiler & Machinery) coverage fills this gap, covering:
- Mechanical failure of production equipment
- Electrical breakdown of control systems
- Boiler and pressure vessel accidents
- Consequential business income loss from breakdown
For manufacturers whose production depends on continuous equipment operation, Equipment Breakdown coverage is often as important as property coverage.
Commercial Property for Manufacturers
Manufacturing facilities typically contain significant concentrations of value:
- Production equipment and machinery
- Raw materials and work-in-progress inventory
- Finished goods inventory
- The building and infrastructure
Ensure your property limits reflect current replacement cost values for all categories — and that Business Income coverage adequately captures your revenue exposure during a restoration period.
Work With Capital & Co
Capital & Co works with manufacturers across a range of industries to build programs that address product liability, property, workers comp, and equipment breakdown exposures. Contact us to review your current program.
Questions About Your Coverage?
Speak with Capital & Co about a strategy built for your business.
