How Insurance For Manufacturing Is Different

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The world of insurance is changing. While you used to have to meet up with an insurance agent in person to discuss your policy options, you can now begin a new insurance policy right online. When I first signed up for an auto insurance policy, I realized that signing up right online led to confusion when I didn't have an agent with me to discuss which policy was best for me. Thankfully, I realized I could chat with an agent right on the website. I then began researching insurance and learned a lot about many types of insurance during the process. I find the ever-changing world of insurance so interesting that I continue to research it and thought that I would help others by posting what I learn on a blog. I hope I can help you make good insurance policy decisions! Check back often for new posts!


How Insurance For Manufacturing Is Different

17 January 2023
 Categories: Insurance, Blog

Insurance for manufacturing businesses is a different ballgame compared to what you'll see even in any other commercial operations. While insurance for manufacturing still has to cover many common issues, such as worker injuries and general liability, it also has to cover these 6 other different scenarios.

Raw Materials

Damage to or loss of raw materials can leave a manufacturer in a tough spot. Similarly, quality issues can trigger issues. Consequently, a company needs to consider the risk to its inputs. Insurance for manufacturing may need to cover raw materials if the goods are hard to come by, take long to ship, or are expensive.

Environmental Hazards

Many manufacturing operations create negative outputs for the environment. While there are mitigation measures in place at most companies, what happens if these systems fail? For example, a company might maintain an artificial pond to contain wastewater until someone can collect it for treatment. What happens if the pond bursts and sends polluted water into a nearby river? Insurance for manufacturing businesses should account for these kinds of potential disasters.

Product Liability

Even if a company only makes components for another organization's products, there may be liability risk. For example, a seatbelt manufacturer could be on the wrong end of a lawsuit if its products are linked to an unusual number of injuries. Make sure your policy is appropriately sized to the number of units your company has out in the world at any given time.


While other companies carry property damage insurance, manufacturers are especially sensitive to potential equipment breakdowns. Particularly if your company depends on a relatively uncommon type of machine, you'll need a policy that accounts for its potential loss. Consider how long a production line might be out of service if specific pieces of equipment fail.

Overseas Liability

Manufacturers are often more likely than other businesses to send products to foreign countries. This creates a new form of liability exposure because your practices and products may be subject to different rules. This is especially true if your company doesn't maintain separate corporate entities in those nations. Also, depending on the countries in question, there could be unusual risks such as civil unrest, natural disasters, or adverse government actions.

Intellectual Property Violations

A manufacturer often depends on intellectual property rights like patents and trademarks to protect its interests. However, outside parties may violate those rights, and you could struggle for years to recover compensation. 

For more info, contact a local company like Fullsteam Insurance.